SONARGAON UNIVERSITY

Thesis and dissertation

TITLE
The impact of big data analytics on supply chain management in the perspectives of
Bangladesh large scale enterprise

Kazi Shahadat Hossain

Sonargaon University

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A dissertation submitted in partial fulfillment of the requirement for the degree of MBA in
Supply Chain Management

By

Kazi Shahadat Hossain

Sonargaon University
Faculty of Business Administration
Department of Procurement and Supply Chain Management
This thesis has been submitted on 11th July 2017 subjects to the approval of syndicate board
meeting of Sonargaon University

Thesis Co-Coordinator Thesis

Supervisor

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 SONARGAON UNIVERSITY ACCESS TO THESIS

I am the author of the thesis entitled Implementation of Six Sigma in Australian Manufacturing
Small and Medium Enterprises submitted for the degree of MBA (Supply Chain Management)
This thesis may be made available for consultation, loan and limited copying in accordance
with the Copyright Act 1968.
3rdPage

'I certify that I am the student named below and that the information provided in the form is
correct'

Full Name: KAZI SHAHADAT HOSSAIN

Signed:

Date: 11th July 2017

CANDIDATE DECLARATION

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I certify that the thesis entitled The impact of big data analytics on supply chain management
in the perspectives of Bangladesh large scale enterprise
submitted for the degree of MBA (Supply Chain Management), is the result of my own work
and that, where reference is made to the work of others, due acknowledgment is given.
I also certify that any material in the thesis that has been accepted for a degree or diploma by
any university or institution is identified in the text.
I certify that I am the student named below and that the information provided in the form is
correct

Full Name: KAZI SHAHADAT HOSSAIN

Signed:

Date: xxxxxxxxxxxxxxxxxxx

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 DEDICATION

I dedicate this thesis to my late father, Mr. Kazi Ahasan Uddin whose motivation, love and
inducements at different times in my life over many years has made my todays stands that I
could write this thesis. My great father is great as he always asserted the journey for knowledge
more conspicuous than worldly destination of opportunities. My dear mother for her joy that
reminds me as of reminiscence to have a smile on my face.
I also feel deeply the incessant friendly co-operation and smiling face of all time my dearest
teacher Prof. Abul Kalam. Without his assistances I could not step into this brave way of this
journey.
To my caring teacher of Supply chain management, Mr. Rana Mirza and his prudent teaching
method that incites the thirsty for the pursuit of knowledge of supply chain management. To
Staff and Students of SU for their energy and inquisitiveness that reminds me to be creative
too.
Todays feeling of my last long stay to European soil of Switzerland with many friends and
colleagues surrounding of the high Alps, green villages, serene deep eyes of fascinated ladies
has been enthralled into illusion of love reflecting resonance of todays flame of supply chain
knowledge.

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 List of Abbreviations

UPS
GPS Global Positioning Systems
EDI Electronic Data Interchange
DPB SCM intersects with data science, predictive analytics, and big data, collectively referred to as DPB

IT Information Technology
GPS Global Positioning System
M2M Machine-to-Machine Communication
SCV Supply Chain Visibility
POS Point of sale POS
PLM Product Lifecycle Management
RFID Radio Frequency Identification
CSCMP The Council of Supply Chain Management Professionals
BDA Big Data Analytics
BBC British Broadcasting Corporation
BSI British Standards Institution
CEO Chief executive officer
CSF Critical success factors
CTQ Critical-to-quality
DPMO Defects per million opportunities
EFQM European Foundation for Quality Management
GE General Electric
GFC Global financial crisis
GM General manager

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 Executive summary
It seems these days that you cant power up your phone or start your browser without seeing
big datathe ever-growing, increasingly detailed and incredibly splintered mountain of
information being collected every minute of every day. From GPS tracking to buying habits,
theres much to learn about customers, employees, partners and more.
With the sheer volume of information available, its very easy to get overwhelmed or lost in
the data. So, how can you utilize massive amounts of data and find only the most important,
relevant information?
Part of the answer already exists within your organization: your processes.
By leveraging your processes as a guide, you can determine the data thats most important to
your business, and use it to increase the efficiency of your supply chain planning, collaboration
and execution. However, while processes are a very useful guide, theyre just the beginning.
Examining massive quantities of data and discerning whats important and what isnt requires
the aid of advanced analytical tools
The information industry is in the middle of a data revolution. An unimaginably vast amount
of data is growing exponentially, providing challenges and opportunities for data-centric
companies to unlock new sources/horizon of economic value and financial advantage, take
better credit and financial risks, spot business trends sooner, provide fresh insights into industry
developments and create new products.
At the same time, data abundance also creates daunting challenges across numerous dimensions
when it comes to the ways and means of handling and analyzing data.
Enormous data flow, as apparent to time, has been fostering the challenge in a greater
dimension while it is being designed under the way of application and means of materializing
and analyzing data.

This white paper this thesis will examine examines the challenges that confront the information
services industry and offers guidance on ways the industry can rethink its operating models and
embrace the sophistication of modern technology to develop a time-compatible data supply
chain (DSC). New tools and techniques to build a next-generation data supply chain (DSC).

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To address the information explosion coupled with the dynamically changing data consumption
patterns, the next-generation platform will also induce information providers to roll out
innovative products at a faster pace to beat the competition from both existing and niche
information players and meet the demand for value added, real-time data and quicker solutions
for end consumers.

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 Foreword

More than ever before organisations are faced with streams of data flooding in from
various channels at an accelerating rate. Data overwhelm can undermine an
organisations ability to comply with data inflows and derive valuable insights.
The problem can be exacerbated by interactions between internal and external parties
up and down the supply chain which, in turn affect business operations. It is becoming
increasingly apparent that supply chains that learn to harness the power of the data
sources benefit significantly; leveraging the advantages of advanced analytics, supply
chains can become more responsive, demand-driven and customer centric. Decision
makers in supply chains are seeking ways to effectively manage big data sources.
There are numerous examples of supply chain operations applying big data solutions
which demonstrate the abundance of process improvement opportunities available
through the effective use of data: Big data solutions that support integrated business
planning are currently helping organisations orchestrate more responsive supply
chains as they better understand market trends and customer preferences. The
triangulation of a range of market, sales, social media, demographic and direct data
inputs from multiple static and dynamic data points provides the capability to predict
and proactively plan supply chain activities. The Internet of Things (IoT)and
machine learning are currently being used in predictive asset maintenance to avoid
unplanned downtimes. IoT can provide realtime telemetry data to reveal the details
of production processes. Machine learning algorithms that are trained to analyse the
data can accurately predict imminent machine fails1. Big data solutions are helping
avoid delivery delays by analysing GPS data in addition to traffic and weather data
to dynamically plan and optimise delivery routes. Applications of big data at a
global level are enabling supply chains to adopt a proactive rather than a reactive
response to supply chain risks (e.g. supply failures due to man-made or natural
hazards, and operational and contextual disruptions). These examples provide just a
glimpse into the numerous advantages derived from the analysis of big data sources
to increase supply chain agility and cost optimisation. While it is a relatively new
approach, it is being embraced by supply chains globally.

In these series we aim to present a more in-depth exploration of the world of big data
and the significant opportunities it provides for supply chains to increase agility and
efficiency.

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Furthermore, we discuss supply chain risk management and resilience enhancement
practices and illustrate how these practices are being used to benefit from big data
solutions to deliver more effective operational results.

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 Abstract
Big data has been cited as the next frontier for innovation, competition, and productivity
(Manyika et. al, 2011). Big data and its applications have increasingly received interest by both
scholars and practitioners. Advancement in information and communication technology (ICT)
has given rise to explosion of data in every field of operations. Working with the enormous
volume of data (or Big Data, as it is popularly known as) for extraction of useful information
to support decision making is one of the sources of competitive advantage for organizations
nowadays. Enterprises are leveraging the power of analytics in formulating business strategy
in every facet of their operations to mitigate business risk. Volatile global market scenario has
compelled the organizations to redefine their supply chain management (SCM). For modern
industry, data generated by machines and devices, product lifecycle management
(PLM)solutions, production planning systems or quality and inventory management systems
has reached a volume of more than a thousand Exabyte annually and is expected to increase in
the next years. This has led to the need of Big Data technologies to store, manage, process,
interpret, and visualize such amount of data. This paper outlines the value that Big Data offers
for supply chains that are increasingly complex. Indeed, Big Data have the potential to
revolutionize supply chain dynamics. I have analyzed and shown the impact of big data
analytics on supply chain management in the perspectives of Bangladesh large scale enterprise.
And it also delineated in an eloquent fashion about the significance in managing end to end
supply chains for achieving business excellence, competitive advantage as well as sustainable
supply chain. A Big Data-centric architecture for SCM has been proposed that exploits the
current state of the art technology of data management, analytics and visualization. The security
and privacy requirements of a Big Data system have also been highlighted and several
mechanisms have been discussed to implement these features in a real world Big Data system
deployment in the context of SCM.
Keyword: Big Data, Analytics, Supply Chain Management, Security,

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 ACKNOWLEDGEMENTS
Starting with the name of Almighty AL LAH, the most Beneficent and the most Merciful.
Writing such acknowledgements made me a burning waiting to reach to destination for which
I have long awaited. The completion of this thesis would not have been possible without the
co-operation, inducements and sacrifice of many individuals.
Firstly, I would like to acknowledge the enormous support and guidance offered to me by my
supervisors, Prof. Abul Kalam who was very much friendly co-operative all along with this
journey, right from the proposal writing to the final submission of this thesis.
To my caring teacher of Supply chain management, Mr. Rana Mirza and his prudent teaching
method that incites the thirsty for the pursuit of knowledge of supply chain management,
indeed.
I would like to extend my gratitude to SU University for giving me the chance to gain this
degree and to all the educational and administrative staff at the Faculty of Business
Administration who contributed directly and indirectly to this achievement.
I would like to acknowledge my mother, for her good wishes and prayers for me, and my late
father, who is gone beyond the ephemeral planet but I always felt his presence around me.
Lastly, but not the least, I wish to thank my adorable wife, Paulin, the best thing that ever
happened to me. Thanks to her for standing by me, for her support and encouragement. Finally,
boundless love to lovely son Aryan waiting with Paulin at dinner; constantly looking forward
for warm embracing, notwithstanding of how late was my home arrival.
And to all my friends and colleagues in Switzerland and Bangladesh, I am deeply grateful to
all of them, for their encouragement and support during the long journey of deliberating this
thesis.

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 Table of contents

Benefit of Big Data

1. Xxxx
2. Xxx
3. xxxxx
What big data can do for supply chain
4. Xxxx
5. Xxx
6. xxxxx

How big data works for supply chain risk management

7. Xxxx
8. Xxx
9. xxxxx

Big vs. small data and how to avoid paralysis by analysis in supply chain
10. Xxxx
11. Xxx
12. xxxxx

Understanding of data science

13. Xxxx
14. Xxx
15. xxxxx

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 CONTENTS

A. Sonargaon University Access to Thesis

B. Candidate Declaration
C. Dedication
D. List of Abbreviations
E. Executive summary
F. Foreword
G. Abstract
H. Acknowledgements
I. Table of contents
J. Contents
K. Introduction
L. Research Methodology
M. What is Big Data?
N. Understanding of Data science
O. Benefit of Big Data
P. Big Data application in SCM
Q. What big data can do for supply chain?
R. How Big data functions with Supply chain management
S. How big data works for supply chain risk management
T. Big vs. small data and how to avoid paralysis by analysis in supply chain
U. The role and mode of Big data in supply chain management
V. Big data Volume, prediction for Future for Business optimization
W. The evolution of the digital supply chain

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 Introduction

In recent years, SCM has become one of the key enablers for achieving competitive
advantage. An effective SCM can be proved critical for the success or failure of an
organization and thus it becomes an important value driver for organizations. Increased
customer demand and variety, intensified competition, increasing complexity and
dynamicity of global operations, pressure on innovation of products and services,
advances in technology particularly information and communication technology (ICT)
have added complexity in designing and managing supply chains. Over the years, the
concepts and practices of SCM have undergone several changes that have been reflected
in its constantly evolving nature. From its initial cost efficiency focus to modern
responsive and agile nature, SCM has witnessed a transformational change at the
operational frontier. To sustain under volatile business environment, it has become
imperative to operate with information driven strategies wherein collaboration among
the members is one of the key success factors. Effective coordination and collaboration
enables the members of a supply chain to achieve its global objectives.

However, sharing of information plays an indispensable role in SCM integration. It

improves customer services and financial performances by providing accurate and
relevant on-time information and also enhances supply chain visibility. It sets and
monitors key performance indicators to highlight variances and inefficiencies and
mitigates the bullwhip effect which is essentially caused due to the distortion of demand
information while moving from downstream to upstream (Cheng et al., 2010; Lee &
Whang, 2000; Lee et al., 1997; Miah, 2015; Vickery et al., 2003). How timely and
accurately an organization can formulate an effective and futuristic strategy has become
a critical issue in the context of modern SCM. Exploiting the rich capabilities of
analytics, organizations can reap the benefits of Big Datadriven insights to work with
optimal lead time and improve prediction of future to cope up with uncertainties.
Researchers have found that in order to achieve seamless coordination or harmony
among the members of a supply chain for taking right decision at right time, to deploy
resources optimally and channelize all activities in right direction, to provide right
product to the customers at right time, information acts as an invisible thread among the
members.

With the rapid evolution and adoption of ICT by the industries, colossal amount of data
is being generated all pervasively from every activity across a supply chain. According

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to the International Data Corporation (IDC), the estimated growth of digital data will be
as high as 40 trillion gigabytes by 2020 as compared to approximately 2.8 trillion
gigabytes in 2012. This opens up enormous opportunity for business organizations to
effectively utilize such gigantic amount of data for making prudent business decisions.
As the business world is progressing towards Industrie 4.0, every object linked with a
supply chain is now acting as a continuous generator of data in structured or unstructured
form. Germany Trade & Invest report (2014) described Industrie 4.0, the upcoming
fourth industrial revolutions, as an intelligent ICT based decentralized real time
production system. In this system, the real and virtual world are connected through a
cyber-physical interface wherein the products and machineries independently exchange
and respond to information for managing end to end processes. In essence, it offers a
technological platform to agglutinate production technologies and smart processes to
establish a smart factory (Germany Trade & Invest, 2014).It is providing organizations
an unprecedented opportunity to leverage informed supply chain strategy for leveraging
competitive advantage. Needless to mention, managing such gigantic volume of data -
Big Data, as it is popularly known - is a stupendous task.

Understanding and tracking of data generation and then processing of data for deriving
useful information to operate a smart supply chain stands as the key to success. Analytics
thus plays a vital role in formulating smart strategies for enhancing the performance of
a supply chain (Khan, 2013).

This paper is an extended work of our previous contribution (Biswas & Sen, 2016). In
this paper, we have highlighted the importance of the role of information in integrating
the components of a supply chain for formulating competitive strategies and predicting
future changes. We have also emphasized the contextual significance of analytics in
understanding and analyzing the data for extracting useful information which form the
rationale for effective decision making. Here, we have summarized the evolution of
supply chain analytics (SCA) and its tacit role in effective SCM and governance. In line
with our previous work (Biswas & Sen, 2016) we propose an architecture for a Big Data-
centric supply chain that is in conformance with the architectural standards. Several
security and privacy requirements are highlighted and mechanisms to achieve them are
also discussed.

The reminder of this paper is organized as follows. Section 2 discusses the evolution of
SCA and its importance in the context of supply chain performance. In Section 3, the
concept of Big Data and the relevance of Big Data analytics in context of SCM are
pointed out. In Section 4, we have described a standard Big Data architecture in the
literature and then have proposed a supply chain specific Big Data system. Section 5

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presents various security and privacy issues that need to addressed in a Big Data system
and also discusses numerous mechanisms and protocols for designing a secure Big Data
architecture. Section 6 concludes the paper while highlighting some future scope of
work.

INTRODUCTION

Big data is the buzzword of the day. However, more than the typical faddish fuzz, big
data carries with it the opportunity to change business model design and day-to-day
decision making that accompany emerging data analysis. This growing combination of
resources, tools, and applications has deep implications in the eld of supply chain
management (SCM), presenting a doozy of an opportunity and a challenge to our eld.
Indeed, more data have been recorded in the past two years than in all of previous human
history. Big data are being used to transform medical practice, modernize public policy,
and inform business decision making (Mayer-Schoenberger and Cukier 2013). Big data
have the potential to revolutionize supply chain dynamics.

The growth in the quantity and diversity of data has led to data sets larger than is
manageable by the conventional, hands-on management tools. To manage these new and
potentially invaluable data sets, new methods of data science and new applications in
the form of predictive analytics, have been developed. We will refer to this new
conuence of data science, predictive analytics, and big data as DPB. Data are widely
considered to be a driver of better decision making and improved protability, and this
perception has some data to back it up.

Based on their large-scale study, McAfee and Brynjolfsson (2012) note, [t]he more
companies characterized themselves as data-driven, the better they performed on
objective measures of nancial and operational results companies in the

top third of their industry in the use of data-driven decision making were on average,
5% more productive and 6% more protable than their competitors (p. 64).

To make the most of the big-data revolution, supply chain researchers and managers
need to understand and embrace DPBs role and implications for supply chain decision
making.

1 Introduction

Big data analytics (BDA) is defined as a holistic approach to manage, process and
analyze the 5 Vs data-related dimensions (i.e., volume, variety, velocity, veracity and

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value) in order to create actionable insights for sustained value delivery, measuring
performance and establishing competitive advantages [Fosso Wamba, S., et al., How
big data can make big impact: Findings from a systematic review and a longitudinal
case study. International Journal of Production Economics, 2015. 0(0): p. xx-xx.]. It has
recently emerged as the next big thing in management. Some scholars and
practitioners even suggest that BDA is the fourth paradigm of science [Strawn, G.O.,
Scientific Research: How Many Paradigms? EDUCAUSE Review, 2012. 47(3): p. 26.,
p.34], or even the next frontier for innovation, competition, and productivity
[Manyika, J., et al., Big data: the next frontier for innovation, competition and
productivity, 2011, McKinsey Global Institute, p.1], or the new paradigm of knowledge
assets [Hagstrom, M., High-performance analytics fuels innovation and inclusive
growth: Use big data, hyperconnectivity and speed to intelligence to get true value in the
digital economy. Journal of Advanced Analytics, 2012(2): p. 3-4, p. 2]. These statements
are mainly driven by the pervasive adoption and use of various tools and technologies,
including social media (e.g., Facebook, Twitter), mobile devices (e.g., laptops,
smartphones), automatic identification technologies enabling the Internet of Things
(IoT) (e.g., radio frequency identification (RFID), Bluetooth), and cloud-enabled
platforms to support intra- and inter-organizational business processes and achieve a
competitive advantage. Some analysts estimate that Twitter users generate more than
250 million tweets per day, while about 50 hours of video are uploaded each minute on
YouTube from around the world. The same analysts estimate that Facebook now holds
more than 90 billion photos, with over 200 million photos uploaded per day
[Sethuraman, M.S., Big Datas Impact on the Data Supply Chain, in Cognizant 20-20
Insights2012, Cognizant: New Jersey.].

The pervasive diffusion of these tools and technologies is expected to transform the way
we currently conduct business. This is particularly true of supply chain management
(SCM). Prior studies of SCM have highlighted the importance of achieving a high level
of integration of inter- and intra-organizational processes and information systems in
order to attain a greater level of seamless coordination and reduce repeated efforts and
related inefficiencies. For example, the combination of RFID-enabled intelligent
products and intelligent services with the existing information and communication
technologies in supply chains (SCs) should play a facilitating role thus making
products and services more visible to SC members and in parallel should offer more
opportunities for quick and efficient SC activities [Fosso Wamba, S., et al., Exploring
the impact of RFID technology and the EPC network on mobile B2B eCommerce: A
case study in the retail industry. International Journal of Production Economics, 2008.
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112( 2): p. 614-629]. SC members will therefore face greater strain as they will be
expected to manage not only their own activities in relation to those products and
services but also the integration of upstream and downstream core business processes
and inter- and intra-organizational information systems. In this context, the access to
critical information for informed decision-making becomes not only a prerequisite but
also a major challenge.

The report by MIT Sloan Institute/SAS Institute (2014) suggests that the reason why big
data analytics is not seen as a new path to value could be that analytics is becoming
more mainstream, and competitive advantage is being eroded by competitors abilities
to build the same capabilities. This suggests that an increasing number of companies
and organisations are adopting big data analytics, but they are not necessarily
experiencing competitive advantage without the barriers of entry being raised to even
higher levels.

The aim of this research is to review this phenomenon and address the above suggestion
against other possible causes, such as the perceived significant steep (technical)
knowledge curve required of companies to adopt data analytics in their business
environments to such a degree that competitive advantage could be not be readily
attained. A hypothesis is therefore formed which argues that the reason for the perceived
slowdown is the result of the inability of companies to grasp, plan or deploy analytics in
their organisations at suitable (technical) levels that are needed in order to impact
competitive advantage. In addition, a secondary hypothesis argues that companies
unwillingness to implement data analytics further than the level that they perceive as
being value-adding is possibly withholding analytics adaptations, thus accounting for
the perceived slow-down.

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The application of data and information flows has dominated supply chain management
(SCM) practices for several decades, in which traditional business analytic methods have
been applied to support decision-making. As technologies have evolved, they have
increasingly enabled supply chains to capture, manage, and analyze data. The mobile
internet, Internet of Things, advanced robotics, 3D printing, and RFID chips are just
some of the technologies that can potentially disrupt the status quo and make supply
chain practices remarkably different [Manyika, J., Chui, M., Bughin, J., Dobbs, R.,
Bisson, P., and Marrs. Disruptive technologies: Advances that will transform life,
business, and the global economy. McKinsey Global Insitute, (2013)]. Embedded in
these technologies are the ability to handle high volumes of diversified data that
traditional information technologies are unable to process. This paradigmatic shift in
data and information is referred to as big data, which enables new knowledge discoveries
in business environments [ Davenport, T.H., Barth, P., and Bean, R. How big data is
different. MIT Sloan Management Review 54(1), 2012, pp. 2224]. From a SCM
perspective, big data can be utilized by various analytic procedures for descriptive,
predictive, and prescriptive purposes that will help companies make more effective
decisions for strategic and operational applications. But, it has been revealed that a gap
between big data theory and supply chain practices exists, and many questions are still
unanswered, e.g., how to leverage big data volumes and unstructured data*
[Mortenson, M.J., Doherty, N.F., and Robinson, S. Operational research from
taylorism to terabytes: A research agenda for the analytics age. European Journal of
Operational Research 241, 2015, pp. 583595. ]. Furthermore, it has been specified that
big data analytics can be applied across the supply chain involving sourcing,
manufacturing, distribution, and marketing*[Sanders, N.R. How to use big data to
drive your supply chain. California Management Review 58(3), 2016, pp. 2648]. Even
though businesses have positive sentiments about big data, the business literature on big
data is rather fragmented and lacks empirical contributions [11]. For instance, a recent
literature review on big data in SCM asserted that contributions are mostly conceptual
and, to a large extent, lack theoretical and methodological rigor [2]. To address this
theoretical gap and to guide SCM practitioners, there is a need for a more thorough
understanding on how big data can increase the value generation of SCM processes.
More specifically, recent papers have suggested future research topics on e.g., how to
integrate big data in business analytics [36], how to capture value from big data using
new theories that encompass cross-functional facets [10], and how to understand what
kind of supply chain questions can be addressed by big data [28]. To summarize, the
potential benefits of utilizing big data analytics in SCM are high, but its application is
rather elusive [28] and lacks empirical research and practical insights [38]. The purpose
of this article is two-fold. First, the purpose is to increase the overall understanding of
20
big data in SCM context by exploring practical insights into the definition of big data,
which could align practitioners and scholars views on big data. The second purpose is
to explore and empirically identify possible areas of application for big data in SCM by
classifying and ranking the application of big data within SCM processes. The article
continues with the underlying theoretical foundation for this study, followed by an
explanation and argument for our choice of method. Then the empirical findings are
presented and discussed against existing theory.

This research paper fosters to find the way how big data has been revolutionizing in
which Supply chain can get competitive advantage and financial benefits too.

In the current environment, competition is shifting from firm versus firm perspective
to supply chain versus supply chain perspective. Therefore, the ability to optimize the
supply chain is becoming the critical issue for companies to win the competitive
advantage. The focus on supply chain management (SCM) has forced many companies
to rethink their competitive strategies [1]. They tend, by necessity, towards collaboration
with exchanging a lot of data. Additionally, many of them are seeking to win with data
[2]. Indeed, the use of big data can offer significant value in such areas as product
development, market demand predictions, supplying decisions, distribution optimization
and customer feedback. Data exchanged by supply chains from service and
manufacturing sectors is increasing sharply and lifts up a growing enthusiasm for the
notion of Big Data. According to several studies and surveys, companies operating in
transport and logistics are those who exploit the most from Big data technologies. For
instance, the logistics leading companies like DHL (Germany), UPS (Unites States) and
Maersk (Denmark) have taken some steps in Big Data field to enhance their
competitiveness [3], [4], [5].

Within the dimension of my research paper of this thesis, I will investigate the role of
big data in the competitiveness of global supply chains. First, we remind the key notion
of big data and its characteristics. In the second section, we present the Supply Chain
Operations Reference (SCOR) model as the standard diagnostic tool for supply chain
management. Then, we identify how Big Data provides opportunities along supply chain
processes.

REFERENCES

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[12] Irfan, D., Xiaofei, X. and Sheng Chun, D. (2008), "A Scor Reference Model of the
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[13] Han, D., Kwon, I. G., Bae, M. And Sung, H. (2002) Supply chain integration in
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Industrial Engineering, 43 (2002) 111-121.

[14] Bouhaddou I., Benabdelhafid A., PLM (Product Lifecycle Management): a key to
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[15] Lockamy III, A. and McCormack, K., 2004. Linking SCOR planning practices to
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24
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2014, LNAI 8557, pp. 214227, 2014
Since the creation of decision support systems in the 1960s, data-driven decisions have become
a key capability for obtaining and sustaining competitive advantage. Today, every transaction
at many levels is collected in some form and stored in a database for decision-making purposes.

Todays data is huge and data is everywhere. Consider that Google receives more than three
billion queries every day, a volume that is thousands of times the quantity of all printed material
in the U.S. Library of Congress; Facebook gets more than 10 million new photos uploaded
every hour; Walmart conducts a million transactions per hour; and the New York Stock
Exchange (NYSE) trades 490 million shares per day. The amount of data generated will
continue to grow exponentially. In fact, the number of RFID tags sold globally is projected to
rise from 12 million in 2011 to 209 billion in 2021. Manufacturers and retailers are collecting
data all along their supply chains. This includes data from POS, GPS, and RFID data, to data
emitted by equipment sensors, to social media feeds. Virtually all companies have information
technology (IT) systems in their back offices. The world we live in is enveloped in data. When
converting terabytes and exabytes into meaningful terms, it is estimated that the data that
companies and individuals are producing and storing is equivalent to filling more than 60,000
U.S. Libraries of Congress. Where is this data going? It is accumulating in large pools growing
larger by the minute. This is big data. In fact, many companies do not even recognize the data
they possess and how valuable it is. Data is designed be traded or sold, and it has salient
economic value. Data is the new asset.

By 2021, firms are expected to have accumulated over 35 zettabytes of data generated from
activities throughout the supply chain (Cognizant, 2012). Processing and storing such high
volumes of data can command high levels of resources within an organization. Wal-Mart, for
example, collects detailed data on every single transaction receipt for every single customer.
Their data can be detailed down to the exact stock-keeping unit (SKU), its quantity purchased
and price, store location, register, and time. Over the course of a day, Wal-Mart collects as
many as 24 million transactions to be stored in its database of 2.5+ petabytes (McCarthy, 2012).

Streams of literature in various fields have proposed that the process of collecting and analyzing
business data to formulate and disseminate actionable intelligence is vital to firm competitive
advantage. In marketing, for example, successful firms tend to be more adept at generating,
disseminating, and responding to market intelligence (Kohli & Jaworski, 1990). In a supply
chain, data transmitted through inter-organizational information systems such as electronic data
interchange (EDI) is the language through which firms communicate and coordinate joint
actions (Hill & Scudder, 2002). Reliance on such firm strategies has only increased with
technological advances, such as radio-frequency identification (RFID) and geo-cache data
generated through global positioning systems (GPS) embedded in consumer electronic devices.

25
Anecdotal exemplars such as Amazon.coms successful customer segmentation efforts only
give companies greater incentive to install even more sensors throughout the supply chain to
amass data with ever-increasing greater levels of detail and volume.

With greater volumes of data collected at finer levels, resource intensity and automation
required for data storage, processing and analysis also increases. As a result, companies need
to clearly specify parameters for data input prior to automated analyses and joint decision-
making.

Moreover, firms facing rapid gains in data detail and volume remain largely without guidance
with regard to the proper use of data. For example, suppliers may gain visibility to both
customer and downstream demand signals through highly costly investments. These data can
be analyzed on many levels of aggregation using a diverse set of quantitative models. Clearly,
understanding the complex relationship among demand signals, data aggregation, and seasonal
forecasting models is an important factor in maximizing the value of both the capital and
relational investment made to enable information sharing.

In the retail supply chain, many firms engage in strategies such as sales and operations planning
(S&OP) and collaborative planning, forecasting, and replenishment (CPFR) through
information sharing (Yao & Dresner, 2008). For example, Wal-Mart leverages its transaction
data to formulate myriad decisions ranging from predicting consumer sentiments to arranging
both internal distribution and coordinated replenishment with external suppliers (Bollier,
2010). Yet, while synchronized decisions can improve integration (Olivia & Watson, 2011)
and operational performance (Barratt & Barratt, 2011), supply chain partners often encounter
difficulties in demand planning. Facing multiple sources of demand signals, demand planners
are often at a loss in selecting the appropriate source and format of the demand signal used to
forecast customer demand.

First, different functions within each firm operate under varying levels of aggregation (Pauwels
et al., 2004). As a result, dominant functions within each firm tend to set the level of
aggregation for analyses such as forecasting (McCarthy et al., 2004). Misguided attempts at
remediating conflicting levels of aggregation, such as decentralized demand planning systems,
can result in more harm than good (McCarthy et al., 2004). Those firms that adopt one-number
forecasting would either utilize disaggregated data to make decisions at the aggregate level
(i.e., bottom-up approach) or utilize aggregate data to make decisions at the disaggregate level
(i.e., top-down approach). The degree of complexity is exacerbated when functions from
different firms attempt to collaborate and share information taken from different levels and
time buckets.

The impact of misaligned data aggregation and levels of decision can result in inaccurate
measurements and suboptimal decisions (Zotteri & Kalchschmidt, 2007), thereby
compromising information relevancy as well as the effectiveness of resource utilization.

26
Second, the need to automate data processing rises along with the volume of data.

Specific to forecasting, myriad quantitative models exist for seasonal and non-seasonal data
(Makridakis et al., 1982; Makridakis & Hibon, 2000). Whereas it is fairly simple for firms to
identify a priori a data series is seasonal or non-seasonal (Chatfield and Yar, 1988), the decision
to use the proper seasonal forecasting model is much more ambiguous. Furthermore, with
increased adoption of POS-sharing in the retail supply chain, suppliers have to consider not
only the proper seasonal forecasting model but also whether or not to use POS to forecast
customer orders. Considering the roles of bullwhip and the mathematical differences in the
additive and multiplicative seasonal factors, choosing the wrong combination of information
source and seasonal forecasting model can inflate forecast error to lead to demand planning
conundrums.

To obtain a greater understanding of the effective use of supply chain data to generate
actionable business intelligence, the goal of this dissertation is to diagnose

the effect of data aggregation in supply chain management to facilitate greater accuracy in
measuring and forecasting supply chain outcomes with sustainable business growth.

Furthermore, this dissertation also attempts to gain additional insight to the effect of demand
signal distortion on the accuracy and

Free Information Business Models, with Data as the New Fuel

Companies such as Duedil, Cortera and Jigsaw (recently acquired by Salesforce.com and
renamed Data.com) are revolutionizing the free business model. The Jigsaw model, for
instance, uses crowdsourcing to acquire and deliver a marketplace for users to exchange
business contact information, worldwide. For sharing information on non-active prospects
that these prospects would gladly do, users get new leads for free. If a user finds incorrect
data, he gets points by updating the record in Jigsaw. Providing incentives to have users
scrub the huge database enables Jigsaw to more easily maintain data integrity.

Essentially, users actively source and update contacts in the Jigsaw database in return for
free access to the companys services. Thus, from a data quality, data entry scalability
(capacity to be changed) and data maintenance perspective (issues that typically plague
systems such as those in the CRM space), Jigsaw is a strong tool that can be used to append
incomplete records, augment(enlarge/improve/increase) leads to build highly targeted
lists, plan territories and gain insights on people and companies with the most complete
B2B data in one place. Jigsaw has already amassed(gather, accrue, collect)more than 30-
plus million contacts and is growing. It sells this information to customers with large CRM
databases who can compare their database to the Jigsaw database, identifying and
cleaning up any redundant (unnecessary, unwanted) records. Jigsaw contacts then make
27
money by offering products geared toward companies interested in increasing, updating
and cleaning their contact directories. These free models intensify competition for
traditional data aggregators (a program that collects related items of content and links to
them).

In addition to Google, which operates on an adsupported (free) model, others like WebMD
(a health information provider) rely on advertising to generate a major portion of their
revenue streams, enabling them to provide free services. They then make additional
money from subscriptions and premium content, as well as listings from individuals who
initially come to avail themselves of free services and end up paying for a listing in order
to heighten awareness for existing and new customers. Such models are allowing newer
entrants to underprice the competition or to offer some portions of their information
portfolio for free. As such, this approach threatens traditional information providers,
forcing them to step up.

How can information services companies compete and remain cost leaders? Many of their
existing DSC systems provide neither enough insight nor a more robust understanding of
their customers and nor do they reveal how their end customers are interacting with
their data. Their existing DSC is not built for handling big data and the corresponding big
data analytics cannot be effectively applied and leveraged to shed light on what the data
means or provide a pathway to reduce IT infrastructure costs to attain greener operations.
Moreover, many information players and their existing DSC systems are not really
leveraging social media and its related opportunities to increase customer engagement,
improve content quality and provide incremental value to the ecosystem.

We are in an era where we trade our data for free goods and services. Never before have
consumers wielded this much power over marketers. All the data activity on the Internet,
through any device, creates click-trails, leaves digital breadcrumbs (a series of connected
pieces of information or evidence), produces data exhaust and creates metadata. There is
enough economic value in this data for an entire industry to be formed around this itself.
We will see a huge influx of companies dealing with the various aspects of data drilling,
shipping, refining, drug discovery and so on. Hence, based on the above precedent, large
players like Exxon, Mobil, Pfizer or Merck could create large standalone data-slicing
organizations.

28
Crowdsourcing is a brilliant way to collect massive data as it brings down the cost of setting
up a data collection unit. However, the data provided by the user community has to be
made credible through data verification by the data quality tools. Although crowdsourcing
might affect data quality, by looking at a large base of users the outliers in data could be
easily found and eliminated.

Data Quality and Cleansing High-quality data is a prime differentiator and its a valuable
competitive asset that increases efficiency, enhances customer service and drives
profitability. The cost of poor data quality for a typical enterprise is estimated to cost 8%
to 12% of revenues. British Gas lost around 180M when data quality problems caused its
project to fail, resulting in degraded customer relationships and contract cancellations.
ABN Amro was fined $80M for not having effective data quality compliance. Severn Trent
Water was fined 26M by regulators for trying to cover up data quality issues created by
its data migration project.6

Crowdsourced data also makes a lot of sense, particularly as business people and
consumers increasingly rely on mobile devices and social media platforms to share data
more freely across geographies. An excellent example of this is the GPS navigation where
the foundation is the map database. Rather than rely solely on a map provider database
that may not necessarily be up to date or accurate, via crowdsourcing users report map
errors and new map features. Thus users can benefit immensely from each others reports
at no cost.

Crowdsourcing is a brilliant way to collect massive data as it brings down the cost of setting
up a data collection unit. However, the data provided by the user community has to be
made credible through data verification by the data quality tools. Although crowdsourcing
might affect data quality, by looking at a large base of users the outliers in data could be
easily found and eliminated.

To address such issues, my research paper is designed hereby to explore one key starting
point, what weve termed the nextgeneration data supply chain. It conceptualizes at a
high level current and emerging elements embedded in a DSC that can help enable new
solutions and explore opportunities, partnerships and alliances to enhance the value
chain. This paper uses data and information interchangeably as data forms the
foundation for any insightful information; increasingly, the two are becoming difficult to
distinguish.

29
Continued Data Deluge Approximately five exabytes (EB)1 of data online in 2002 rose to
750 EB in 2009 and by 2021 it is projected to cross the 35 zettabytes (ZB)2 level as seen in
Figure

As a matter of fact that 90% of the data in the world was created in the last two years, a
sum greater than the amount of the data generated in the last 40 years. The worlds
leading commercial information providers deal with more than 200 million business
records, refreshing them more than 1.5 million times a day to provide accurate
information to a host of businesses and consumers. They source data from various
organizations in over 250 countries, 100 languages and cover around 200 currencies.

30
Their databases are updated every four to five seconds. With new data about companies
instantaneously created and parameters of existing companies worldwide changing by the
minute, the challenge will only intensify.

The worlds leading providers of science and health information, for example, address the
needs of over 30 million scientists, students and health and information professionals
worldwide. They churn out 2,000 journals, 20,000 books and major reference works each
year. Users on Twitter send more than 250 million tweets per day. Almost 50 hours of
video are uploaded per minute on YouTube by hundreds of millions of users worldwide.
Facebook houses more than 90 billion photos with over 200 million photos uploaded per
day.4

4. Data points obtained directly from the following company Web sites: Elsevier,
Twitter, YouTube and Facebook

While knowledge is hidden in these exabytes of free data, data formats and sources are
proliferating. The value of data extends to analytics about the data, metadata and
taxonomy constructs. With new electronic devices, technology and people churning out
massive amounts of content by the fractional second, data is exploding not just in volume
but also in diversity, structure and degree of authority. Figure 2 provides an indicative
estimate of the data bombarding the Internet inone 60 second interval, with astounding
growth forecasted.

Ever-changing data consumption patterns and the associated technology landscape raise
data security and privacy issues as data multiplies and is shared freely ever more.
Convergence challenges related to unstructured and structured data also add to the
worries. Google, Facebook, LinkedIn and Twitter are eminent threats to established
information players as are nontraditional niche information providers such as Bloomberg
Law, DeepDyve, OregonLaws, OpenRegs, etc. that provide precise information targeted at
specific customer groups. The big data phenomenon threatens to break the existing data
supply chain (DSC) of many information providers, particularly those whose chains are
neither flexible nor scalable and include too many error-prone, manual touch points. For
instance, latency in processing all data updates in the existing DSC of one well-known
provider currently ranges from 15 to 20 days, versus a target of 24 hours or less. That
directly translates to revenue loss, customer dissatisfaction and competitive disadvantage.

These risks are real. Google reported a 20% revenue loss with the increased time to display
search results by as little as 500 milliseconds. Amazon reported a 1% sales decrease for an
additional delay of as little as 100 milliseconds

31
The application of data and information flows has dominated supply chain management
(SCM) practices for several decades, in which traditional business analytic methods have
been applied to support decision-making. As technologies have evolved, they have
increasingly enabled supply chains to capture, manage, and analyze data. The mobile
internet, Internet of Things, advanced robotics, 3D printing, and RFID(RADIO-FREQUENCY
IDENTIFICATION uses electromagnetic fields to automatically identify and track tags
attached to objects that contain electronically stored information. Passive tags collect
energy from a nearby RFID reader's interrogating radio waves). Chips are just some of
the technologies that can potentially disrupt the status quo and make supply chain
practices remarkably different. Embedded in these technologies are the ability to handle
high volumes of diversified data that traditional information technologies are unable to
process. This paradigmatic shift in data and information is referred to as big data, which
enables new knowledge discoveries in business environments [6]. From a SCM
perspective, big data can be utilized by various analytic procedures for descriptive,
predictive, and prescriptive purposes that will help companies make more effective
decisions for strategic and operational applications. But, it has been revealed that a gap
between big data theory and supply chain practices exists, and many questions are still
unanswered, e.g., how to leverage big data volumes and unstructured data [20].
Furthermore, it has been specified that big data analytics can be applied across the supply
chain involving sourcing, manufacturing, distribution, and marketing [27]. Even though
businesses have positive sentiments about big data, the business literature on big data is
rather fragmented and lacks empirical contributions [11]. For instance, a recent literature
review on big data in SCM asserted that contributions are mostly conceptual and, to a
large extent, lack theoretical and methodological rigor [2]. To address this theoretical gap
and to guide SCM practitioners, there is a need for a more thorough understanding on
how big data can increase the value generation of SCM processes. More specifically, recent
papers have suggested future research topics on e.g., how to integrate big data in business
analytics [36], how to capture value from big data using new theories that encompass
cross-functional facets [10], and how to understand what kind of supply chain questions
can be addressed by big data [28]. To summarize, the potential benefits of utilizing big
data analytics in SCM are high, but its application is rather elusive [28] and lacks empirical
research and practical insights [38]. The purpose of this article is two-fold. First, the
purpose is to increase the overall understanding of big data in SCM context by exploring
practical insights into the definition of big data, which could align practitioners and
scholars views on big data. The second purpose is to explore and empirically identify

32
possible areas of application for big data in SCM by classifying and ranking the application
of big data within SCM processes.

Major business players who embrace Big Data as a new paradigm are seemingly
offered endless promises of business transformation and operational efficiency
improvements. In Supply Chain Management (SCM) in particular, some
examples have captured the attention of both practitioners and researchers,
hitting the headlines of recent news. Amazon uses Big Data to monitor, track
and secure 1.5 billion items in its inventory that are laying around 200 fulfilment
centres around the world, and then relies on predictive analytics for its
anticipatory shipping to predict when a customer will purchase a product, and
pre-ship it to a depot close to the final destination (Ritson, 2014). Wal-Mart
handles more than a million customer transactions each hour (Sanders, 2014),
imports information into databases to contain more than 2.5 petabytes and asked
their suppliers to tag shipments with radio frequency identification (RFID)
systems (Feng et al., 2014) that can generate 100 to 1000 times the data of
conventional bar code systems. UPS deployment of telematics in their freight
segment helped in their global redesign of logistical networks (Davenport and
Patil, 2012). SCM organisations are in undated with data, so much that McAfee
and Brynjolfsson(2012) reported business collect more data than they know
what to do with. This is apparently true in firms that are considered a
benchmark for warehouse data management, marketing or transportation.
Nonetheless, the reality reveals that these cases are not just anecdotes of
success; they are the face of a change where failure to adapt could mean
irrelevance. Hopkins et al. (2010) reported from a Sloan Management Review
survey that analytics top performers outpace industry peers performance up to
three times.
While most organisations have high expectations from Big Data Analytics
(BDA) in their supply chain, the actual use is limited and many firms struggle
to unveil its business value (Pearson et al., 2014). In the pursuit of a change to
that situation and a willingness to guide the SCM practice to capitalise BDA,
the overall aim of this research is to close the knowledge gap between data
science and Supply Chain Management domain, linking the data, technology
33
and functional knowledge in BDA applications across procurement,
transportation, warehouse operations and marketing. Specifically, this paper
will (1) redefine, by research on previous scientific work, what BDA means in
the context of Supply Chain Management, and how it differs and has evolved
from previous analytics technologies; (2) develop taxonomy of Big Data within
SCM that identifies and classifies the different sources and types of data arising
in modern supply chains and (3) suggest some applications of BDA and show
the potential high value this technology offers to solve complex SCM
challenges.

2.RELATEDWORKANDKNOWLEDGEGAPS
BDA in SCM is a heterogeneous topic as it builds upon cross-disciplinary work
from various areas. Business challenges rarely show up in the appearance of a
perfect data problem (Provost and Fawcett, 2013), and even when data are
abundant, practitioners have difficulties to incorporate it into their complex
decision making that adds business value (Shah et al., 2012). Hazen et al. (2014)
described the field as new and emergent. Barratt et al. (2014) recognised the
need for searching more practical implications of BDA in SCM, and they
manifested their intention to attract research projects about BDA for the Council
of Supply Chain Management Professionals (CSCMP) 2014 annual conference.
Sanders (2014) published the first book combining both SCM theory and Big
Data, Big Data Driven Supply Chain Management that provides great insight in
the managerial implications of implementing BDA. The most cited call for
research in BDA came from Waller and Fawcett (2013), who highlighted the
importance that conducting scientific research in the area where SCM intersects
with Big Data and advanced analytics techniques from Operational Research
domain could illuminate a myriad of new opportunities for both practitioners
and academia. They attributed the lack of publications or applications of data
science, predictive analytics, and Big Data in the context of SCM, to not fully
address the conceptual requirements in integrating domain knowledge with
quantitative skills.

34
From the above mentioned evidence, a clear knowledge gap has been identified,
and with the intention to bridge the gap, this research has set off.
Taking into account the above describing circumference as cognizable plot of
research, it should be opined that a clear knowledge differentiation or gap has
been observed and thus todays this paper will be in fashion to bridge the gap.

RESEARCH METHODOLOGY

Gimenez (2005) argued that conducting research in SCM through the application of
multiplemethodsassures thatvariances aretrait-related andnotmethod-related,as wellas
the fact that each methodology is more appropriate for the development of a particular
stage of the research. InordertobuildadefinitionofBDAanditsassociatedlist
ofthemes,thefirst partofthe research was aboutunderstandingBDAinitsown terms. Like
most of the areas close to BigData, BDA meaning is mainly what people have made of
it. The systematic literature review transformed a broad spectrum of documentation first
into a delimited set of themes, and then into synthesised extracted data. The analysis of
the themes structure resulted in a somewhat exhaustive description of its features,
specifically in the SCM context and produced a solid base of
knowledgeandsubstantivejustificationonwhichtobuildsubsequentphasesoftheresearch.
The inclusion of the case study in this work was to maintain practicality at the core. Case
studies investigated simultaneous BDA examples, typically in emerging practices, thus
being a successful way of including the latest trends detected in the industry. Both
businesscases from the

6th International Conference on Operations and Supply Chain Management, Bali,2014

literature as well as those reported through semi-structured interviews with consultants

at a major consulting company in the UK were used. The combined systematic literature
review and case studies was used to create a toolset that is based on academic sources
as well as practical experience and that was helpfulandusefultouse.

35
METHODOLOGY

For this study, a hybrid approach derived from work by Ngai and Wat [22] and Fosso
Wamba et al. [.Ngai, E.W.T. and F.K.T. Wat, A literature review and classification of electronic commerce research. Information &
Management, 2002. 39(5): p. 415-429 and , Fosso Wamba, S., A. Anand, and L. Carter, A literature review of RFID-enabled healthcare applications and
was used. This approach consisted in a
issues. International Journal of Information Management, 2013. 33(5): p. 875-891]

search using the following keywords: Big data AND supply chain within the
SCOPUS database. SCOPUS is the largest abstract and citation database of peer-
reviewed literature. This bibliographic database holds more than 19,000 peer-reviewed
journals, over 1,800 open access journals, more than 600 trade publications, 350 book
series, and content from over 435 million web pages. The search was conducted on
Friday 30 January 2015, and we found 17 articles on the topic [23.Brandau, A. and J. Tolujevs, Modelling
and analysis of logistical state data. Transport and Telecommunication, 2013. 14(2): p. 102-115. 24.Fattah, A., Going beyond data science toward an
analytics ecosystem: Part 3. IBM Data Management Magazine, 2014(3). 25.Fawcett, S.E. and M.A. Waller, Supply chain game changers-mega, nano,
and virtual trends-and forces that impede supply chain design (i.e., Building a Winning Team). Journal of Business Logistics, 2014. 35(3): p. 157-164.
26.Fawcett, S.E. and M.A. Waller, Can we stay ahead of the obsolescence curve? On inflection points, proactive preemption, and the future of supply
chain management. Journal of Business Logistics, 2014. 35(1): p. 17-22. 27.Groves, W., et al., Agent-assisted supply chain management: Analysis and
lessons learned. Decision Support Systems, 2014. 57(1): p. 274-284. 28.Hazen, B.T., et al., Data quality for data science, predictive analytics, and big
data in supply chain management: An introduction to the problem and suggestions for research and applications. International Journal of Production
Economics, 2014. 154: p. 72-80. 29.Huang, Y.Y. and R.B. Handfield, Measuring the benefits of erp on supply management maturity model: A big data
method. International Journal of Operations and Production Management, 2015. 35(1): p. 2-25. 30.Jin, Y. and S. Ji, Partner choice of supply chain based
on 3d printing and big data. Information Technology Journal, 2013. 12(22): p. 6822-6826. 31.Kumar, A., F. Niu, and C. R, Hazy: Making It Easier to
Build and Maintain Big-Data Analytics. Communications of the ACM, 2013. 56(3): p. 40-49. 32.Li, Y., N. Ren, and M. Cao, WBS data analysis method
based on information supply Chain. Journal of Applied Sciences, 2013. 13(12): p. 2355-2358. 33.Sonka, S., Big data and the ag sector: More than lots of
numbers. International Food and Agribusiness Management Review, 2014. 17(1): p. 1-20. 34.Tien, J.M., The next industrial revolution: Integrated
services and goods. Journal of Systems Science and Systems Engineering, 2012. 21(3): p. 257-296. 35.Waller, M.A. and S.E. Fawcett, Data science,
predictive analytics, and big data: A revolution that will transform supply chain design and management. Journal of Business Logistics, 2013. 34(2): p.
77-84. 36.Waller, M.A. and S.E. Fawcett, Click here for a data scientist: Big data, predictive analytics, and theory development in the era of a maker
movement supply chain. Journal of Business Logistics, 2013. 34(4): p. 249-252. 37.Wu, J., Y.H. Ni, and Y. Lv, Ontology-driven approach for distributed
information processing in supply chain environment. Zhejiang Daxue Xuebao (Gongxue Ban)/Journal of Zhejiang University (Engineering Science),
2014. 48(11): p. 2017-2024. 38.Yesudas, M., G. Menon, and V. Ramamurthy, Intelligent operational dashboards for smarter commerce using big data.
IBM Journal of Research and Development, 2014. 58(56).

39.Zhang, Q., et al., A case study of sensor data collection and analysis in smart city: Provenance in smart food supply chain. International Journal of
Distributed Sensor Networks, 2013. 2013].

Understanding of Data science

Data science, also known as data-driven science, is an interdisciplinary field

about scientific methods, processes, and systems to extract knowledge or
insights from data in various forms, either structured or unstructured,

[Dhar, V. (2013). "Data science and prediction". Communications of the ACM. 56 (12): 64. doi:10.1145/2500499.

&Jeff Leek (2013-12-12). "The key word in "Data Science" is not Data, it is Science". Simply Statistics].
similar
to data mining.

36
Data science is a "concept to unify statistics, data analysis and their related
methods" in order to "understand and analyze actual phenomena" with data.

[ Hayashi, Chikio (1998-01-01). "What is Data Science? Fundamental Concepts and a Heuristic Example". In

Hayashi, Chikio; Yajima, Keiji; Bock, Hans-Hermann; Ohsumi, Noboru; Tanaka, Yutaka; Baba, Yasumasa. Data

Science, Classification, and Related Methods. Studies in Classification, Data Analysis, and Knowledge Organization.

Springer Japan. pp. 4051. ISBN 9784431702085. doi:10.1007/978-4-431-65950-1_3]

It employs techniques and theories drawn from many fields within the broad
areas of mathematics, statistics, information science, and computer science,
in wider dimension particular from the subdomains of machine learning,
classification, cluster analysis, data mining, databases, and visualization.

Turing award winner Jim Gray imagined data science as a "fourth paradigm"
of science (empirical, theoretical, computational and now data-driven) and
asserted that "everything about science is changing because of the impact of
information technology" and the data deluge.[ Stewart Tansley; Kristin Michele Tolle (2009).
The Fourth Paradigm: Data-intensive Scientific Discovery. Microsoft Research. ISBN 978-0-9825442-0-4] & [ Bell,

G.; Hey, T.; Szalay, A. (2009). "COMPUTER SCIENCE: Beyond the Data Deluge". Science. 323 (5919): 1297

1298. ISSN 0036-8075. doi:10.1126/science.1170411]

When Harvard Business Review called it "The Sexiest Job of the 21st
Century" [6] the term became a buzzword, and is now often applied to business
analytics,[7] or even arbitrary use of data, or used as a sexed-up term for
statistics.[8]

37
Data science process flowchart

The term "data science" (originally used interchangeably with "datalogy")

has existed for over thirty years and was used initially as a substitute for
computer science by Peter Naur in 1960. In 1974, Naur published Concise
Survey of Computer Methods, which freely used the term data science in its
survey of the contemporary data processing methods that are used in a wide
range of applications.

In 2001, William S. Cleveland introduced data science as an independent

discipline, extending the field of statistics to incorporate "advances in
computing with data" in his article "Data Science: An Action Plan for
Expanding the Technical Areas of the Field of Statistics," which was
published in Volume 69, No. 1, of the April 2001 edition of the International
Statistical Review / Revue Internationale de Statistique.[ Cleveland, W. S. (2001). Data
science: an action plan for expanding the technical areas of the field of statistics. International Statistical Review /

Revue Internationale de Statistique, 2126]

In his report, Cleveland establishes six technical
areas which he believed to encompass the field of data science:

38
multidisciplinary investigations, models and methods for data, computing
with data, pedagogy, tool evaluation, and theory.

What is Big Data

Big data is not about the data itself. It is about the ability to solve problems better than
ever before. And now pretty much everyone can do it.

What big data is and what it isnt Every day, millions of orders are placed,
places are liked, reviews are written, photos are geo-tagged, sensors are
digitizing previously unobtainable information, weather events are tracked, and
transportation asset positions are provided. Retail giant Wal-Mart, for
example, handles over 1 million customer transactions every hour, feeding
databases estimated at more than 2.5 petabytesthats the equivalent of 167
times the books in Americas Library of Congress.1 Facebook, the leading
social-networking website, is home to 40 billion photos.2 And decoding the
human genome involves analyzing 3 billion base pairswhich took 10 years
the first time it was done in 2003 but now be achieved in one week.3
The amount of data that is created and that can be consumed is almost limitless.
And its valuable informationif you know what to do with it. Thats big data
for you. Simply put, big data is the ability to consume, manipulate and
understand massive quantities and multiple types of data.
39
Three Use Cases for Big Data in the Supply Chain
How much data? Literally more than the human mind can conceptualize or
analyze. And more than what on-hand database management tools can handle.
And thats no exaggeration. Combing through these mountains of information
requires the usage of advanced algorithms or advanced analytical tools, such as
the Apama Streaming Analytics Platform specifically designed to tackle big
data.
Big data potentially gives you the power to identify simple and complex issues
in real time.
Properly utilized, big data can give businesses real-time insight they can use to
make critical business decisions, see inconsistencies before they become
problems and increase efficiency at every step of their processes. This includes
previously unfathomable methods of supply chain planning, procurement,
supply chain fraud detection, partner collaboration and end-toend supply chain
execution.
What big data isnt? Running multiple reports out of multiple data sources for
spreadsheet analysis. Its simply too much. Too many data sources. Too many
fields. Too much time. So much, in fact, that without dedicated resources or the
types of advanced tools mentioned above, many enterprises miss out on the
benefits of big data. And in the long run, that can be a huge misstep.
Point is, the amount of data isnt shrinking any time soon. Its not a matter of if
you get on board with big data, but when. And most importantly, if youre faster
than your peers to leverage and capitalize on it.
So what does that mean in the real world?
By utilizing big data, companies can better analyze millions of orders around
the globe to identify the at-risk orders, or those that are from first orders with
large quantities and short lead times for a large, long-pursued prospect. In-
memory big data allows for these issues to be addressed in sub-second response

40
times by determining which transactions can be cost effectively managed and
which cannot be resolved at any cost.
For any business that lives and dies by its supply chain, thats not just big. Its
huge
Big data is a term that was coined in 2012 and has since then emerged to one of
the top trends in business and technology. Big data is an agglomeration of
different technologies resulting in data processing capabilities that have been
unreached before. Big data is generally characterized by 4 factors. Volume,
velocity and variety. These three factors distinct it from the traditional data use.

Big data is unique because of the volume, variety, and velocity of the data, which today
is widely available and much less expensive to access and store (McAfee and
Brynjolfsson 2012). Volume can occur in many ways. There are more data because,
among other reasons, the data are captured in more detail. For instance, instead of just
recording that a unit sold at a particular location, the time it was sold and the amount of
inventory at the time of the sale, is also captured. As another example, many companies
that did not record daily sales by location and by stock-keeping unit to make inventory
decisions, now do. Moreover, long global supply chains necessitate data capture at
multiple points in the supply chain. In addition, there is now a proliferation of consumer
sentiment data resulting from Tweets, Likes, and product reviews on websites. Such data
must be analyzed and quantied. Software companies that provide algorithms designed
to assess text from reviews and Tweets are cropping up in large numbers.

BIG DATA

The full impact of the application of big data in logistics and supply chains is not yet
fully realised, however the potential is clearly apparent. The role of Big Data in demand
networks and logistics supply chains is broad, with new applications being re-imagined
at a considerable rate. Big Data analytics can be applied to a range of diverse data sources
to create effective predictions of future demand; such synchronous and asynchronous
data sources include: Inter organizational historic data, regional and national economic
data, industry specific data, demographic and target market specific data. All of which
can be collated from third party analysis or as part of an extra-organizational effort on
part of a specific demand network. Big data analytics can be applied in conjunction
with other application of big data analytics which had previously been considered
logically separate such as logistics specific analytics, geopolitical analytics and human
41
resource applications of big data. We can therefore consider that a demand network
that utilises multiple areas of emergent big data applications would be able to effectively
predict and articulate future demand.

Due to its pivotal role in the extended supply chain, the logistics function is in the best
position to address emergent demand signals and effectively address them. Future
competitive advantage for the logistics and supply chain sector could be enabled through
the application of demand networks that utilise big data sources through connected IoT
devices. Smart, connected products require that companies build an entirely new
technology infrastructure, consisting of a series of layers known as a technology stack,
explains Michael E. Porter of the Harvard Business Review. The volume variety,
velocity and veracity of big data is indeed growing exponentially.
Every day hundreds of millions of people take photos, make videos and send texts. Across the globe businesses
collect data on consumer preferences, purchases and trends. Governments regularly collect all sorts of data
from census data to incident reports in police departments. The deluge of data is growing fast. The total
amount of data in the world was 4.4 zettabytes in 2013. That is set to rise steeply to 44 zettabytes by 2020. To
put that in perspective, one zettabyte is equivalent to 44 trillion gigabytes.

20 billion terabytes of data that is being created every second, Every

day, we create 2.5 quintillion
bytes of data that worth of 10 million blu-ray discs of data so much that 90% of the
data in the world today has been created in the last two years alone (IBM, 2013; Baesens,
2014). This data comes from everywhere: sensors used to gather climate information,
posts to social media sites, digital pictures and videos, purchase transaction records, and
cell phone GPS signals to name a few (IBM, 2015). According to SAS Institute Inc.:

Every minute, we send 204 million emails, generate 1.8 million Facebook likes, send
278 thousand tweets, and upload 200 thousand photos to Facebook.

12 million RFID tags (used to capture data and track movement of objects in the
physical world) were sold in 2011. By 2021, its estimated this number will increase to
209 billion. The big data industry is expected to grow from US$10.2 billion in 2013 to
about US$54.3 billion by 2017.

Bibliography
Baesens, B., (2014), Analytics in a big data world; the essential guide to data science and its applications, Whiley and Sons Inc. Emmett, S., and Crocker, B., (2006), The relationship-driven supply chain: creating a culture of collaboration
throughout the chain, Aldershot, Hampshire, England. EY (2015), Middle class growth in emerging markets, Hitting the sweet spot, on-line resource accessed on 19/8/2015 from: http://www.ey.com/GL/en/Issues/Driving-growth/Middle-class-
growth-in-emergingmarkets Gartner, (2015), Gartner Says 4.9 Billion Connected "Things" Will Be in Use in 2015, Newsroom online resource accessed on 20/08/2015 from: http://www.gartner.com/newsroom/id/2905717 Gartner, (2015b),
Gartner Says 6.4 Billion Connected "Things" Will Be in Use in 2016, Up 30 Percent From 2015, Newsroom online resource accessed on 20/08/2015 from: http://www.gartner.com/newsroom/id/3165317 Howells, R. (2012), A 360 Degree
Perspective On Customer Engagement, Forbes Business, online resource accessed on 20/08/2015 from: http://www.forbes.com/sites/sap/2012/11/13/a-360-degree-perspective-oncustomer-engagement/ Howells, R. (2014), The emergence of the
demand network, SAP Business Trends, on-line resource accessed 20/09/2015 from: http://scn.sap.com/community/business-trends/blog/2014/02/03/the-emergence-of-thedemand-network IBM, (2013), Bringing Big Data to the Enterprise, on-
line resource accessed 20/12/2015 from: http://www.ibm.com/big-data/us/en IBM, (2015), Bringing Big Data to the Enterprise, on-line resource accessed 20/09/2015 from: https://www-01.ibm.com/software/data/bigdata/what-is-big-data.html
Manyika, J., Chui, M., Brown, B., Bughin, J., Dobbs, R., Roxburgh, C., and Byers, AH., (2011) Big Data: the next frontier for innovation, competition and productivity, McKinsey global Institute(MGI) , McKinsey & Company. Marr, B. (2015),
Big Data; using smart big data analytics and metrics to make better decisions and to improve performance, John Wiley & Sons, pp. 18. Morgan, J, (2014) A Simple Explanation Of 'The Internet Of Things', Forbes Leadership, on-line resource
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resource accessed 29/09/2015 from: http://www.inboundlogistics.com/cms/article/how-the-internet-of-thingsimpacts-supply-chains/ Thalbauer, H. (2014), The Time to Move to a Demand Network Has Come, on-line resource accessed 20/9/2015
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42
43
II. BIG DATA The term Big Data has been first used in 1997 by two NASA researchers
to refer to the visualization challenge for computer systems with quite large data sets
[6]. Since then, researchers and specialists in the information Management have been
progressively interested by it until it become a phenomenon in different areas. Indeed,
Big Data has a positive impact in various domains; it helps revamping supply chains,
increasing sales and managing customer loyalty in marketing, optimizing real-time route
and reducing costs in transportation, minimizing risks in finance and even enhancing the
efficiency of some treatments in medicine. Big Data has originally described extensive
heterogeneous datasets in the digitized, networked, sensor-laden and information-driven
world. However, the name has come to be the technologies improving the storage,

44
management, processing, interpretation, analysis and visualization of the huge flood of
data [7][8]. Big Data covers 5 dimensions: Volume, Velocity, Variety, Veracity and
Value. That is the 5 Vs of Big Data. The logistics sector is ideally placed to benefit
from the technological and methodological advancements of Big Data. Big Data is
initially driven from the service and supply chain management (SCM) such as nance,
manufacturing, information technology (IT) etc. Recently, Auto-ID technology (e.g.
RFID, Barcode) has been widely used in supply chain. Big Data brings a new source of
competitive advantages for logistics involvers to carry out supply chain management so
as to obtain enhanced visibility, the ability to adjust under demand and capacity
fluctuations in a real-time basis, as well as the insights into customer behaviors and
patterns to achieve smarter pricing and better products [9]. The Council of Supply Chain
Management Professionals (CSCMP) thus is currently pursuing two complementary
projects, which aim to address what Big Data means for logistics and supply chain
management [10].

One is Big Data: What does it mean for Supply Chain Management? carried by Mark
Barratt (Marquette University), Annibal Camara Sodero (University of Arkansas), and
Yao Jin (University of Arkansas). The other is The What, How and Why of Big Data
in Supply Chain Relationships: A Structure, Process, and Performance Study
collaborated by R. Glenn Richey (The University of Alabama), Chad W. Autry (The
University of Tennessee), Frank G. Adams (Mississippi State University), Tyler R.
Morgan (The University of Alabama), Kristina Lindsey (The University of Alabama),
and Taylor Wade (University of Alabama).

Certain investigations for research and applications were carried out by Wang,
Gunasekaran, Ngai, and Papadopoulos (2016) for reviewing the Big Data analytics in
logistics and supply chain management. Recently, a special issue edited by Sanders and
Ganeshan in POMS (Production and Operations Management) focused on the Big Data
in Supply Chain Management.

III. SUPPLY CHAIN MANAGEMENT (SCM) Supply chain members are

interconnected by a significant physical flow that includes raw materials, work-in
process inventories, finished products and returned items, information flows, and
financial flows. In todays ever-increasing competition and globalized business
environment, manufacturers have been exploring innovative technologies and strategies
45
to achieve and sustain competitive advantage. One of the strategies, which has wide
acceptance and agreement among academicians and practitioners, is supply chain
management (SCM) [11] [12] [13] [14]. Managing the increasing complexity in supply
chains is necessary to companies to compete better in global market. Complexity in
supply chains is associated with material and information flows between supply chain
partners. A

IV. DATA APPLICATIONS IN SCM Companies are learning to turn large-scale

quantities of data into competitive advantage. Their precise forecasting of market
demand, radical customization of services, and entirely new business models
demonstrate exploitation of their previously untapped data. This section intends to
provide some assistance to practitioners to understand where they could begin to
incorporate Big Data Analytics (BDA) across their supply chains, allowing them to
potentially solve complex problems relevant for SCM. Table 2 briefly summaries some
practical applications on how BDA can transform particular areas of SCM in its different
processes. In this table, we highlighted the importance of Big data for supply chains for
all the SCOR process. We have particularly noticed that most studies concern only one
or two supply chain process. To summarize the table, we can say:

Planification: The Big Data reduce the risk of infrastructure investments and contracted
external

capacities. Supplying: Big data is revolutionizing how supplier networks form, grow,
proliferate into new markets and mature over time.

Production: The combination of analytics techniques enables to optimize

manufacturing processes, shopfloor management and manufacturing logistics [18, 19]
which allows producing new products in a more way [20] and reducing logistics cost
[21].

Distribution: big data analytics can be used to forecast demand changes, and
accordingly match their supply. This can increasingly benefit the manufacturing, retail,
as well as transport and logistics industries.

Return: the use of big data analytics enables to know customers perceptions of offered
products and services and discover their unobservable characteristics in order to
understand market demands and anticipate future consumer product variety desires. The
customers knowledge enables to develop new products and services more customized
and consequently improve their satisfaction [19, 22].

46
 By applying such analytics to big data, valuable information can be extracted and
exploited to enhance decision making and support informed decisions. We argue that in
order to succeed in Big Data, we need to consider the data no longer as an information
asset but as a strategic asset. By doing so, organizations in SCM could realize the
economic value inherent in the data and the potential to capitalize it when combined
with BDA through revenue generating activities.

The use of simulation with statistics and visualization techniques allows analyzing
markets, production and sales data on a real time and computing the key performance
indicators relative to supply chain for developing strategic, tactical, and operational
decision making [23].

However, Chae et al. [24] argue that for improving operational performance and
increasing big data analytics value, it is necessary that supply chain analytics techniques
be combined with SCM initiatives such as Total Quality Management, Just in time,
and Statistical Process Control which can be used to monitor and control data quality
in a supply chain.

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[23] B. Chae, C. Yang, D. Olson, and C. Sheu, The impact of advanced analytics and
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50
Information Services Trends A deep-dive into todays information industry reveals
the following patterns.

Continued Data Deluge Approximately five exabytes (EB)1 of data online in 2002 rose
to 750 EB in 2009 and by 2021 it is projected to cross the 35 zettabytes (ZB)2 level as
seen in Figure 1. Statistics3 also indicate that 90% of the data in the world was created
in the last two years, a sum greater than the amount of the data generated in the last 40
years. The worlds leading commercial information providers deal with more than 200
million business records, refreshing them more than 1.5 million times a day to provide
accurate information to a host of businesses and consumers. They source data from
various organizations in over 250 countries, 100 languages and cover around 200
currencies.

Their databases are updated every four to five seconds. With new data about companies
instantaneously created and parameters of existing companies worldwide changing by
the minute, the challenge will only intensify.

The worlds leading providers of science and health information, for example, address
the needs of over 30 million scientists, students and health and information professionals
worldwide. They churn out 2,000 journals, 20,000 books and major reference works
each year. Users on Twitter send more than 250 million tweets per day. Almost 50 hours
of video are uploaded per minute on YouTube by hundreds of millions of users
worldwide. Facebook houses more than 90 billion photos with over 200 million photos
uploaded per day.

While knowledge is hidden in these exabytes of free data, data formats and sources are
proliferating. The value of data extends to analytics about the data, metadata and
taxonomy constructs. With new electronic devices, technology and people churning out
massive amounts of content by the fractional second, data is exploding not just in volume
but also in diversity, structure and degree of authority.

Ever-changing data consumption patterns and the associated technology landscape raise
data security and privacy issues as data multiplies and is shared freely ever more.
Convergence challenges related to unstructured and structured data also add to the
worries. Google, Facebook, LinkedIn and Twitter are eminent threats to established
information players as are nontraditional niche information providers such as
Bloomberg Law, DeepDyve, OregonLaws, OpenRegs, etc. that provide precise
information targeted at specific customer groups. The big data phenomenon threatens to

51
break the existing data supply chain (DSC) of many information providers, particularly
those whose chains are neither flexible nor scalable and include too many error-prone,
manual touch points. For instance, latency in processing all data updates in the existing
DSC of one well-known provider currently ranges from 15 to 20 days, versus a target of
24 hours or less. That directly translates to revenue loss, customer dissatisfaction and
competitive disadvantage.

These risks are real. Google reported a 20% revenue loss with the increased time to
display search results by as little as 500 milliseconds. Amazon reported a 1% sales
decrease for an additional delay of as little as 100 milliseconds.

Free Information Business Models, with Data as the New Fuel Companies such as
Duedil, Cortera and Jigsaw (recently acquired by Salesforce.com and renamed
Data.com) are revolutionizing the free business model. The Jigsaw model, for
instance, uses crowdsourcing to acquire and deliver a marketplace for users to exchange
business contact information, worldwide. For sharing information on non-active
prospects that these prospects would gladly do, users get new leads for free. If a user
finds incorrect data, he gets points by updating the record in Jigsaw. Providing incentives
to have users scrub the huge database enables Jigsaw to more easily maintain data
integrity.

Essentially, users actively source and update contacts in the Jigsaw database in return
for free access to the companys services. Thus, from a data quality, data entry scalability
and data maintenance perspective (issues that typically plague systems such as those in
the CRM space), Jigsaw is a strong tool that can be used to append incomplete records,
augment leads to build highly

Data Volumes Are Growing

Figure 1

IDC predicts that between 2009 and 2020 digital data will grow 44 times to 35ZB,
adding .8ZB of data in 2020 alone. 44% 2011 2021

The big data phenomenon threatens to break the existing data supply chain of many
information providers, particularly those whose chains are neither flexible nor scalable
and include too many error-prone, manual touch points. targeted lists, plan territories
and gain insights on people and companies with the most complete B2B data in one
place. Jigsaw has already amassed more than 30-plus million contacts and is growing. It
sells this information to customers with large CRM databases who can compare their
database to the Jigsaw database, identifying and cleaning up any redundant records.

52
Jigsaw contacts then make money by offering products geared toward companies
interested in increasing, updating and cleaning their contact directories. These free
models intensify competition for traditional data aggregators.

In addition to Google, which operates on an adsupported (free) model, others like

WebMD (a health information provider) rely on advertising to generate a major portion
of their revenue streams, enabling them to provide free services. They then make
additional money from subscriptions and premium content, as well as listings from
individuals who initially come to avail themselves of free services and end up paying
for a listing in order to heighten awareness for existing and new customers. Such models
are allowing newer entrants to underprice the competition or to offer some portions of
their information portfolio for free. As such, this approach threatens traditional
information providers, forcing them to step up.

How can information services companies compete and remain cost leaders? Many of
their existing DSC systems provide neither enough insight nor a more robust
understanding of their customers and nor do they reveal how their end customers are
interacting with their data. Their existing DSC is not built for handling big data and the
corresponding big data analytics cannot be effectively applied and leveraged to shed
light on what the data means or provide a pathway to reduce IT infrastructure costs to
attain greener operations. Moreover, many information players and their existing DSC
systems are not really leveraging social media and its related opportunities to increase
customer engagement, improve content quality and provide incremental value to the
ecosystem.

We are in an era where we trade our data for free goods and services. Never before have
consumers wielded this much power over marketers. All the data activity on the Internet,
through any device, creates click-trails, leaves digital breadcrumbs, produces data
exhaust and creates metadata. There is enough economic value in this data for an entire
industry to be formed around this itself. We will see a huge influx of companies dealing
with the various aspects of data drilling, shipping, refining, drug discovery and so on.
Hence, based

The Digital Data Deluge One Minutes Worth of Data Flow

Figure 2

20 New victims of identity theft

47,000 App downloads

53
$83,000 In sales

204 million Emails sent

20 million Photo views

61,141 Hours of music

3,000 Photo uploads

100,000 New tweets

277,000 Logins

30 Hours of video uploaded

320+ New Twitter accounts

$83,000 In sales

100+ New LinkedIn

13,000 New mobile users13 5 Botnet infections

6 New Wikipedia articles published

6 million Facebook views

2+ million Search queries

1.3 million Video viewsAnd Future Growth Is Staggering

cognizant 20-20 insights 4

on the above precedent, large players like Exxon, Mobil, Pfizer or Merck could create
large standalone data-slicing organizations.

Mergers and Acquisitions, Industry Consolidation and Footprint Expansion Many

information providers have expanded into new markets through M&As and with local
partnerships. They seek to integrate all acquired companies into a single enterprise-level
DSC. Having started in legal publishing, Thomson Reuters now has a footprint across
various information domains, such as healthcare, tax and accounting, intellectual
property, financial, media, risk and compliance and even science. A leading financial
information provider has recently moved its data collection and storage operations in
Italy to a partner. It has also bought tools for data interoperability between enterprise-
level services.

54
Some players are also consolidating data programs to find synergies in their business
line operations. They also want newer data sources to enhance data quality and variety.
Figure 3 depicts how two large players, Thomson Reuters (TR) and Information
Handling Services (IHS), have grown through acquisition during the last decade.

This model is proving more attractive as data processing scale, distribution and brand
power becomes ever more critical.

Acquisitions cause significant problems for companies DSCs. There is almost certain
to be data quality loss from disparate systems and operational inefficiencies caused by
the lack of a unified view of data. DSC integration issues cause increased latency, slower
time to value and customer access problems. Many existing DSCs were built as stand-
alone systems with closed architectures, and have undergone many customizations. This
makes integration difficult, raising costs and slowing payback time. It also increases
maintenance and ongoing enhancement costs. Integrating newer functionalities
developed using advanced integrated development environments (IDE), debugging and
automation tools makes the development lifecycle an extremely complex task and
transferring taxonomies becomes complicated. For these archaic systems, lack of
productivity tools and limited hardware and software options result in greater time to
market to meet dynamic business requirements or regulatory compliance.

As the industry grapples with the information explosion, the question on every CIOs
mind is

Thomson Reuters and Information Handling Services Growth via Acquisitions

Source:

Cognizant analysis of Thomson Reuters and IHS data published on each companys Web
site. Figure 3

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Growth of Thomson Reuters and Information Handling Services Through Acquisitions

Thomson Reuters (TR) acquires leading information products, solutions and publishers
across domains - La Ley, Primark, Carson Group, IOB (Brazil), Online business of
Dialog. TR acquires Current Drugs, GardinerCaldwell, launches Reuters Messaging.

55
TR acquires Information Holdings Inc, TradeWeb, CCBN; sells Thomson Media group
and Drake Beam Morin. IHS acquires Cambridge Energy Research Associates, USA
Information Services.

TR acquires Solucient, Scholar One, Quantitative Analytics, MercuryMD. IHS acquires

Construction Research Consulting, Assets of geoPLUS, CHD-Canadian, Nixon Digital
Logs.

Thomson Corporation and Reuters Group PLC combine to form TR. IHS acquires
Global Insight, JFA International, Dolphin Software, Environmental Software
Providers, Divestco USA, Prime Publications, Documental Solutions, Reservoir
Visualization.

TR continues its acquisition spree NewsEdge Corp, Select Harcourt General div,
FindLaw. IHS steadily begins information provider acquisitions across energy,
economics, geopolitical risk, sustainability and supply chain management - Petroleum
Data Services Division, Accumap Enerdata.

TR sells print-based healthcare magazines; exits newspapers; acquires Elite

Information Group. IHS acquires Petroleum Limited, GeoFluids Data.

TR partners with Merrill Lynch, Chicago Mercantile Exchange; acquires Global

Securities Information, Tax Partners, Action Images. IHS acquires Content and Data
Services from i2, American Technical Publishing, Jebco, TerraBase, Mapit.

IHS acquires Exploration Data Services of Gulf Coast, PCNAlert, GDS, RapiData,
Geological Consulting Services, Environmax, Janes Information Group, John S.Herold,
SDG Oil & Gas, McCloskey Group.

TR adopts International Financial Reporting Standards (IFRS). IHS acquires Lloyd's

RegisterFairplay completely, LogTech Canada, Environmental Support Solutions,
Prmiere.

DSC at a Glance

OPTIMIZATION OPPORTUNITIES

Data Supply Chain Maturity Assessment

Data Supply Chain Monitoring Dashboard

Data Governance and Master Data Management

Platform & Infrastructure (Cloud Solutions, Open Source Solutions)

56
Data Sourcing &

Collection

Data Quality & Cleansing

Data Enrichment

Data Management

Data Delivery

Data Qualityas a Service (DQaaS)

Statistical Automation Tools

Open Source Data Quality Tools

Data Validation & Cleansing BPaaS

Search Performance Enhancement

Data Mining & Advanced Analytics

Data Driven Simulations

Extreme On-demand Cloud Analytics

Big Data & No-SQL

Storage Optimization & Cloud Computing

Data Warehouse Appliances & Utilities

Data Transformation - Tagging & Quick Reference Codes

Data Visualization & Enhanced User Experience

Social Media Integration

Data as a Service (DaaS)

Multi-Channel, Device Friendly Data Delivery

Data Collection by Crowd-sourcing

Multi-Platform, Integrated Workow Tools

Crowd-sourced Data Digitization

57
Business Process as a Service (BPaaS)

DATA SUPPLY CHAIN (DSC)

COMMON CATALYSTS

Figure 4

By reengineering the existing DSC, from data sourcing through data delivery, providers
can transform their ability to ingest, process and distribute content under a wide variety
of new business models.

how they can handle, manage and analyze this data avalanche better. From the
aforementioned points, what clearly emerges is a definite need for the information
providers to reexamine their existing DSC for potential solutions. They should leverage
their strategic and technology partner capabilities in this discovery and eventual
implementation process. Starting points include: Are the providers ready to take
advantage of the above tipping points to emerge as lean and agile players to increase
shareholder value? How can providers help users find relevant and compact
information in a flood of big data?

To address such issues, this paper explores one key starting point, what weve termed
the nextgeneration data supply chain. It conceptualizes at a high level current and
emerging elements embedded in a DSC that can help enable new solutions and explore
opportunities, partnerships and alliances to enhance the value chain. This paper uses
data and information interchangeably as data forms the foundation for any insightful
information; increasingly, the two are becoming difficult to distinguish.

The Next-Generation Data Supply Chain By reengineering the existing DSC, from data
sourcing through data delivery, providers can

transform their ability to ingest, process and distribute content under a wide variety of
new business models. The key objective is to create a next-generation DSC that:
Optimizes operational efficiencies. Reduces data latency. Is flexible to accommodate
new data sources. Is scalable to handle future data volumes. Improves data quality
while dynamically meeting consumer demands. Explores newer monetization models
with data as an asset. Provides faster time to market and the potential for greater
revenue recognition. Figure 4 represents paradigms that could create a truly modern
DSC. The following subsections present salient thoughts around some of the prime
components of such an upgraded DSC that could address current and futuristic data
issues.

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Data Sourcing and Collection This category includes business process outsourcing
(BPO), business process as a service (BPaaS)5

cognizant 20-20 insights 6

and crowdsourcing. Typically, organizations have treaded the traditional BPO path by
focusing only on daily operational tasks to deliver the outcome. But is there year-round
work for data operations to have a dedicated BPO team? Until the need for a dedicated
BPO team is felt, it is tempting to have a temporary pay-peruse team but
crowdsourcing, as mentioned earlier, can be considered as a replacement for
traditional outsourcing. The crowd refers to the users, who are volunteers with common,
social, financial or even intellectual motivation to accomplish a task. They share
solutions for mutual benefit with the crowdsourcer (organization or an individual) who
is the problem owner.

Such distributed problemsolving addresses scalability through worldwide access to

people and data almost free of cost and generates innovative results by simplifying an
otherwise complex task that is too difficult to handle internally. There are numerous
examples of projects using the crowd to successfully collect and analyze data, some of
which are noted later in this paper. Operating cost assessments for crowdsourced data
using US$/ full-time equivalent (FTE)/hour suggests savings of about 60% (in the U.S.)
to around 65% to 70% (in India) over traditional outsourcing. But how dependable is
crowdsourcing? The crowd may not work in all situations. Situations where work is
intermittent is one place where crowdsourcing might not work. In this case, BPaaS could
be a more practical middle road approach to integrate business, tools and information
technology and to achieve greater opportunities to optimize operations and drive
efficiency and flexibility. The BPaaS model retains a lightweight in-house data reporting
team to interact with an outsourced team who are specialists in handling data production
and validation with tools residing on the Cloud. BPaaS pushes standardization across
many data sources and embodies a flexible payper-use pricing model.

The BPaaS proposition comes with infrastructure, platform and software as a service
models without affecting the traditional benefits of outsourcing such as process expertise
and labor

arbitrage. The cloud combination provides hyperscalability and the ability to deliver
solutions affordably. Financial benefits are in tune with reduced operating costs of up to
30%, thereby cutting capital expenditures on up-front investments. Although BPaaS is
not a panacea, the benefits of a variable pricing model combined with technology and

59
business process excellence that reduce or eliminate large capital demands certainly go
beyond cost savings. BPaaS needs to be embraced as a next-generation delivery model.

Data digitization entails conversion of physical or manual records such as text, images,
video and audio to digital form. To address the proliferation of nonstandard data formats
from multiple data sources globally, and to preserve and archive data in an orderly
manner with simple access to information and its dissemination, data must be
standardized. Data digitization does that. With electronic devices, portables, Internet and
rapidly evolving digital applications growing in importance, it becomes imperative to
adopt data digitization techniques and procedures to create a truly global marketplace.
Embracing this will not only help providers to contend with the convergence of
structured and unstructured data, but also enable the producer to reach the consumer
directly, cutting out inefficient layers. But how you do it depends on how your DSC is
organized.

For example, how do you digitize 20 years of newspaper archives in less than three
months? The New York Times did exactly that by using the power of collective human
minds. The Times

showed archived words (as scanned images) from the newspaper archives to people
who are filling out online forms across different Web sites to spell the words and help
digitize the text from these archives. The subscribing Web sites (generally unrelated to
the digitization process) present these images for humans to decipher and transform into
text, as part of their normal validation procedures that even optical character recognition
(OCR) procedures cannot interpret properly. Text is useful because scanned newspaper
images are difficult to store on small devices, expensive to download and cannot be
searched. The images also protect any suspicious interventions from any automated
software programs or bots, ensuring that only humans validate the words. The sites
then return the results to a software service that captures and aggregates this digitized
textual information. With the system reported to display over 200 million words,
scalability of the crowd provides

With electronic devices, portables, Internet and rapidly evolving digital applications
growing in importance, it becomes imperative to adopt data digitization techniques and
procedures to create a truly global marketplace.

cognizant 20-20 insights 7

quick results as in each case the human effort is just a few seconds and represents
digitization and validation at its best.

60
Crowdsourced data also makes a lot of sense, particularly as business people and
consumers increasingly rely on mobile devices and social media platforms to share data
more freely across geographies. An excellent example of this is the GPS navigation
where the foundation is the map database. Rather than rely solely on a map provider
database that may not necessarily be up to date or accurate, via crowdsourcing users
report map errors and new map features. Thus users can benefit immensely from each
others reports at no cost.

Crowdsourcing is a brilliant way to collect massive data as it brings down the cost of
setting up a data collection unit. However, the data provided by the user community has
to be made credible through data verification by the data quality tools. Although
crowdsourcing might affect data quality, by looking at a large base of users the outliers
in data could be easily found and eliminated.

Footnotes

1) 1 Exabyte (EB) = 1018 bytes and is equal to 260 in binary usage.

2) 1 Zettabyte (ZB) = 1021 bytes and is equal to 270 in binary usage.

3). Where angels will tread, The Economist ,

http://www.economist.com/node/21537967 4). Data points obtained directly from the
following company Web sites: Elsevier, Twitter, YouTube and Facebook.

5). Business process as a service, or BPaaS, is an application delivered as a service that

is used by serviceprovider teams that perform business tasks on behalf of the service
recipient. BPaaS combines traditional business process outsourcing (BPO) and software
as a service (SaaS) to optimize business processes and elevate outcomes. 6). British Gas,
ABN Amro and Severn Trent Water examples: Business Value for Data Quality,
http://www.x88.com/whitepapers/x88_pandora_data_quality_management.pdf

7). Hadoop is a free (open source) Java-based programming framework that supports the
processing of large data sets in a distributed computing environment. It is primarily
conceived on a MapReduce paradigm that breaks applications into smaller chunks to be
processed in a distributed fashion for rapid data processing.

8). How to save millions through storage optimization,

http://www.networkworld.com/supp/2007/ ndc3/052107-storage-optimization-
side.html

61
9). SynapSense Bolsters Data Center Infrastructure Management Solutions with New
Energy Management Tools,
http://www.reuters.com/article/2011/06/29/idUS251193+29-Jun-2011+BW20110629

10). IT Governance: How Top Performers Manage IT Decision Rights for Superior
Results, Peter Weill and Jeanne Ross, Harvard Business School Press.

According to a new report from IBM Marketing Cloud, 10 Key Marketing Trends For
2017, 90% of the data in the world today has been created in the last two years alone,
at 2.5 quintillion bytes of data a day! As of 2012, these data are being creating every day. If
such data are compacted in a CD put side by side that touches moon surface. And, says
the report, with new devices, sensors, and technologies emerging, the data growth rate
will likely accelerate even more. In this white paper, marketing experts share their
thoughts on the key marketing trends for 2017 with an eye toward keeping you ahead of
the shifts that are rapidly transforming the industry and reshaping customer demands.

For the supply chain leader, Big Data is a new concept. It is not one that is currently well
understood. It will be overhyped and overpromised before the concepts reach
mainstream adoption. However, it is here to stay. The goal of this report is to better
educate and prepare the supply chain leader for this change. In this report, we define the
concepts and share insights to help leaders better understand how Big Data concepts can
help solve problems in todays supply chain.

For most respondents, the quantitative survey that accompanied this report was tough to
complete. The concepts are new and not well understood. So much so, that only one-in-
four survey respondents could complete their responses to the questionnaire. While over
240 people started the survey, only 53 could finish it. The open-end comments from the
study listed below sum up the current state of the industry well

In 2014, the world RFID market is worth US$8.89 billion, up from US$7.77 billion in
2013 and US$6.96 billion in 2012. This includes tags, readers, and software/services for
RFID cards, labels, fobs, and all other form factors. The market value is expected to rise
to US$18.68 billion by 2026.

2.1 The big data terminology

Big data as a research field is multidisciplinary and relatively new. Big data is related
to business intelligence and business analytics and has emerged as a separate
concept, whereby structured data have become unstructured and mobile- and
sensor-based technologies allow context-specific analysis [4]. In view of
management perspective, big data is a holistic approach for obtaining actionable

62
 insights to create a competitive advantage [10]. The technological component of
big data is a prerequisite for its value generation for cases in which information
systems are to cope with data collection, data management, and data utilization
with the purposes of supporting business needs, deploying new business models,
and improving existing processes [1]. Big data differs from business analytics in
terms of the 5Vs: volume, variety, velocity, veracity, and value [10]. For data
collection, the characteristics of data have become more diverse and include
various data formats like numbers, text, images, and audio [13]. Companies have
been logging their transactions and activities resulting in large amounts of internal
data. Combining this with the Internet of Things has enabled access to external data
sources that can support the business even further, because it creates insights on
the business environment at a more granular level [1]. Finally, the pace at which
data are captured through advanced technologies, i.e., in real time, enables faster
responses to changes as they occur [6]. For data management, the structured and
unstructured data are to be stored in different systems in which a transparent IT-
infrastructure enables data integrations and data sharing [9]. A knowledge
discovery process of data recording, data integration, data analysis, and data
presentation are to be deployed and designed to support business purposes and
decision-making [24]. Here various analytic techniques are to be applied, such as
machine learning, data mining, and visualization methods [24]. Intra- and inter-
organizational decision support systems rely on a network of systems for which
governance procedures assure reliable data analytics [8].

For data utilization, knowledge discovered is either to support decision-making or to make

automated decision-making [7]. The analytic insights derived can identify problems and
opportunities within existing processes, discover explanatory and predictive patterns
about what will happen and provide reasons why, and determine the best possible
outcome between alternatives based on accumulated knowledge [36]. Ultimately,
utilizing big data should increase performance outcomes that, from SCM perspective, can
be measured as market, operational, and financial performance

Big data applications in SCM

The research domain of SCM is wide and contains several technical points of departures
such as sourcing, operations management, logistics, finance, and IT. Many definitions of
SCM exist, but for the purpose of the present paper we rely on the following definition
provided by Stock and Boyer [32]: The management of a network of relationships within
a firm and between interdependent organizations and business units consisting of

63
material suppliers, purchasing, production facilities, logistics, marketing, and related
systems that facilitate the forward and reverse flow of materials, services, finances and
information from the original producer to final customer with the benefits of adding value,
maximizing profitability through efficiencies, and achieving customer satisfaction. The
application of big data in SCM has been referred to as SCM data science [35], predictive
analytics [28], business analytics, big data analytics and supply chain analytics [36], which
are principally similar terminologies for applying advanced qualitative and quantitative
analytics for SCM purposes by utilizing the vast amount of fast moving and diversified data
available. Overall, there are two distinct approaches of applying big data; it can either
improve existing processes by focusing on current business needs and challenges, or data
can be explored to create sellable products and services as new value propositions [34].
The potential of big data is not limited to manufacturing companies; retailers, service
providers, healthcare professionals, and governments, among others, also see big data
potential [10]. A survey of 145 responses shows that large service companies and their
supply chains account for more employees and higher revenues than manufacturing
companies; the service supply chains are therefore important to include for SCM theory
building [29]. In this regard, the supply chain of both physical products and service
deliveries can both benefit from big data. On an overall supply chain level, a structured
literature review demonstrates that big data can be applied in SCM for operational and
development purposes, value discovery, value creation, and value capture [2]. Analytic
applications are best utilized across the supply chain, where analytics operate
crossfunctionally and as an integral part of company strategy [27]. In this context, Sanders
[27] identifies source, make, move, and sell as primary areas of application for big data.
For source big data may be used to segment suppliers, evaluate sourcing channel
options, integrate with suppliers, and support supplier negotiations. For make it involves
granular performance reporting, mitigation of capacity constraints, inventory
optimization, facility location/layout, and workforce analytics. For move the application
of big data involves routing, scheduling, using transportation alternatives, optimizing, and
maintaining vehicles. Finally, for sell and marketing purposes, big data enables
microsegmentation of customers, the capture and prediction of customer demand and
behavior, and price and assortment optimizations. These applications are defined as
conceptual, but also involve some empirical grounding. Furthermore, another literature
review by Wang et al. [36] identifies the application of supply chain analytics in SCM as a
strategic asset to be applied in several operational and strategic SCM processes. They
establish a five-level analytic maturity framework for analytic applications in SCM. Level
one and two are functional and process-based analytics that can be deployed in supply
chain operations covering demand planning, procurement, production, inventory, and

64
logistics. This involves, for example, aligning supply and customer demand at stock
keeping unit level, increasing supply-chain visibility, managing and mitigating risks,
managing real-time performance, and optimizing processes. Furthermore, collaborative,
agile, and sustainable analytics as maturity level three, four, and five can be deployed in
strategic SCM settings for strategic sourcing, supply-chain network design, and product
design and development. This involves e.g. evaluation and selection of suppliers, the
physical configuration of the supply chain, and to meet fluctuating demand requirements
and utilizing market opportunities by having a rapid product design process. Further
studies include the use of big data in the entire product life cycle from the beginning to
end of life [17] and within human resources [35].

How is big data being applied in supply chain operations?

Despite the largest growth of data analytics being experienced in downstream customer
insights, analytics can have applications across the end-to-end supply chain (see Figure
below). Supply chains that are embracing big data capability development, first need to
become aware of the benefits that big data solutions can deliver to their operations.
Decisions need to be made about the cost effectiveness of prioritizing certain parts of
their operations. Holistic big data solutions applied to the whole supply chain can
involve high costs, making supply chain decision makers more selective in customising
solutions to specific operations. Below Figure depicts of Applications of big data
analytics in supply chain operations

65
Supply chains are moving into the digital world through multiple initiatives
simultaneously. It will not be concerning social data for the sake of social, or data for
the sake of data, or mobile for the sake of mobile, or instead, it will be about the
convergence of these new technologies. As they converge, an underlying data set will
grow not only in volume, but also in variety and velocity. It will fuel a new set of
predictive analytics and capabilities. These new understandings will forge a path forward
enabling a new foundation for supply chain leaders to solve new business problems. This
is just the advent of revolutionary stage of Big Datas polarize while Supply chain is in
the threshold to be forged in its own strategic design.

Nowadays, we are in position to hear most technology vendor have been speaking the
language of Big Data. It makes the headlines of industry publications. The challenge for
supply chain leaders will be to sidestep the extravagance and stay above the decayed
fray to leverage Big Data concepts to power new forms of process innovation.

Big Data: A Revolution not an Evolution For the supply chain leader, and their teams,
Big Data is a new concept. It comes with new terms and revolutionary thinking. The
world of supply chain applications that has been defined by neat, nice packaged
applications where the vendors are well-known is changing.

66
Traditional supply chain applications evolved to use transactional data to improve the
supply chain response. The foundational element of supply chain systems is order and
shipment data. These data forms are used extensively in the three primary applications
of supply chain management: Enterprise Resource Planning (ERP), Advanced Planning
Systems (APS) and Supply Chain Execution (SCE). The genesis of Enterprise Resource
Planning (ERP) systems was to improve the order-to-cash and procure-to-pay
functionality and maintain a common code of accounts for financial accounting.
Similarly, Advanced Planning Systems (APS) applied predictive analytics to these two
data types to plan and improve the supply chain response. In parallel, Supply Chain
Execution (SCE) systems evolved to improve organizational order-to shipment
capabilities.

The gap in importance and perceived performance of enterprise applications for supply
chain management has never been higher (reference Supply Chain Insights Report,
Voice of the Supply Chain Leader, May 2012). For the business leader, it is not about
data. It is about solving the business problem. In fact, as supply chain leaders try to
tackle new problems, most do not realize that they are entering into the world of Big
Data, it just happens. The term is not in their perceiption. They just want to do more,
and solve new problems, with new forms of data. They are frustrated with current
systems. The projects that can border into Big Data concepts include:

Anticipate through Advanced Analytics. As companies build risk mitigation strategies

an important question is, How long does it take the company to learn about product and
service failures in the market? These are the questions that the organization does not
know to ask. Techniques like text mining and rules-based metaphysics (ontologies) are
used to build listening capabilities to grasp early and mitigate issues quickly.

Listen, Test and Learn. Todays technologies allow corporations to know their
customers and get direct connect in the form of ratings and reviews, blog comments and
feedback through virtual planet. These data forms are largely unstructured. As digital
marketing programs become digital business, organizations are seeking to listen cross
functionally to customer sentiment and use advanced analytics to test and learn in vitro
to the market response. Less than 4.5% of supply chain leaders can effectively listen to
social data and evaluate it cross-functionally to understand customer sentiment. For most
companies, social data is limited to the digital marketing team.

Sense before Responding. The traditional supply chain responds. It is often a late and
inappropriate response. It is based on history not current market data. Consequently, the

67
traditional supply chain is impecunious tattered at sensing either changes in demand or
supply.

Adapt to Change. Todays supply chains are hard wired. They are inflexible. The
response is based on average values and simple if-then-else logic. Supply chain
leaders today are looking for more flexibility in their systems, but they are not sure what
this means. Leaders are turning to new dimension of predictive analytics of rules-based
ontologies to eliminate the skeptical through learning systems.

The capabilities of the organizations response are being developed at the application of
newly converged dimension of optimization, pattern recognition and learning systems

Deliver Products Safely. Temperature controlled supply chains are based on volumes
of data. As sensors improve, the data is increasing in both volume and velocity. RFID
sensors/pallet or tote sends high volumes of data requiring new forms of pattern
recognition to better sense and respond. The cold chain is ripe for a Big Data
transformation.

Drive New Channel Programs. As companies rethink channel programs, the

combination of mobile and social programs with eCommerce and digital devices offers
new opportunities. It means different things in different industries. In retail it is termed
Omni channel, while in consumer products it is termed Digital Path to Purchase (DP2P).
For retailers and consumer products companies, they know that decisions are made at
the shelf; yet the data that they see and respond to every day is limited to their own
company data. This is pushing a process redesign. Mobile, social and eCommerce data
is being combined with downstream data to make this a reality. This data is quickly
approaching for some leaders as a petabyte.

Digital Manufacturing.

Event-based planning transforming to real-time sensing based on the Internet of Things

that is becoming viable base for companys productivity. The use of mobility and digital
inputs from equipment sensors and Programmable Logic Controllers (PLCs) is
transforming process manufacturing. Maintenance programs, production schedules and
planning can now be based on machine output, not theoretical meantime failure
calculations.

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 Digital Service. In a similar fashion, the use of mobility and digital inputs from heavy
equipment are transforming service industries. Airplanes communicate equipment
health on landing, expensive earth movers transmit signals in remote locations regularly,
and windmill components send signals at regular intervals to control towers. These
signals are then used to plan service and part replacement. The Internet of Things is
transforming service industries. The data is streaming with high volumes.

Rethinking of Supply Chain Visibility. Geolocation, mapping data and visualization

along with supply sensing transmission (e.g., sensors on items, totes, trucks, and rail
cars) transforms supply chain visibility from near real-time to real-time data feeds
augmented by actual location information. For many, this is transformational.

These initiatives are spread throughout the organization. Most are in their infancy. One
by one, companies are trying to use new forms of data to improve supply chain
excellence. However, as they work on the projects, they stumble into new territory. They
stumble into the world of Big Data supply chains where data no longer can fit within
relational databases, and analysis requires new forms of parallel processing. They learn,
albeit sometimes the hard way, that it requires a new approach. They learn that they
cannot stuff these new forms of data into yesterdays systems.

SUPPLY CHAIN LEADERS MEET BIG DATA

Todays supply chains are more complex. The data has grown in volume, variety and
velocity. While the structured data and the systems that use them will not go away, the
new forms of data offer new opportunities for companies to solve previously
unanswered problems. These new data types do not fit into traditional applications or
data models as well. It is for this reason that it is a revolution not an evolution. Big
Data systems are a means to an end.

The following figure is the Big Data Emerging in Supply Chain

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The conundrum for many is that this is happening at a time when companies do not
believe that they use the data that they have very well. Dirty data is the number one
issue for supply chain teams, and these new forms of data are largely a mystery.

A Look at History The worlds technological per-capita capacity to store information

has roughly doubled every 40 months since the 1980s. Todays supply chains are
surrounded by mounds of external data that cannot be used by traditional supply chain
systems. As of 2012, 2.5 quintillion (2.5X1018) bytes of data are created every day1.

Supply chain systems are now thirty five years old. They were first defined based on
limited sets of enterprise data that could be represented through rational database
models and processed in minutes or hours. The threshold for an organization to think
about Big Data may be stimulated by the size of the data or by the need to use new
forms and types of data to solve new data problems. For most, it will be about FAR
more than parallel processing or cloud-based services. Supply chain teams will never
be early adopters of the concepts.

Late in the 1990s, the concepts of Big Data started in science when meteorologists
mapping weather, scientists modeling large physics simulations and/or biologists
mapping genomes were no longer able to use conventional techniques. Difficulties
were encountered in data capture, storage, search, sharing and analysis leading to new
techniques.

In 2008, it was adapted by eCommerce and telecommunication giants when they could
not solve business problems through conventional means. Web search had the problem

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of querying very large distributed aggregations of loosely structured data. The data was
usually large (then petabytes and exabytes and now approaching zetabytes), the variety
of data was high and the velocity of the data was high (streaming data, sensor data, and
mobile data). It was also often incomplete and inaccessible (requiring inference from
new forms of predictive analytics). As a result, it required new techniques and
architectures to process the data and to sense data problems.

As we extend the concepts of supply chain from the customers customer to the
suppliers supplier, supply chain leaders are also facing this boundary. The data is no
longer structured. We cannot listen, test and learn about consumers without embracing
unstructured data. While the largest complaint in enterprise supply chain systems is
dirty data, we will slowly realize that the current data is not dirty, but different. We
will also learn that the road before us will magnify the differences. Supply chain
leaders have not seen anything yet. The building of the end-to-end supply chain will
give us new forms of different data (that will initially be called dirty) that will need to
be embraced using new and different techniques. This is the world of Big Data.

CURRENT STATE

While it is new, companies are beginning to recognize that they have a problem. And,
that they need to do something. Among the respondents in the survey, we find that:

One-in-three Companies has a Big Data Initiative. Today, 36% of organizations

currently have a cross-functional team evaluating the potential of Big Data for their
supply chains.

Primarily Led by IT Leadership. The leader of the team evaluating Big Data usage
and technologies is usually the Chief Information Officer/IT (47% of respondents). It
is less frequently a cross-functional team (21% of respondents) or the line of business
leader (21% of respondents). The responses to the survey show a low understanding of
the concepts by supply chain leaders.

System Complexity is High for Transactional Systems. The average supply chain
leader has many systems. On average, they have two instances of Enterprise Resource
Planning (ERP). The largest ERP instance in the survey was five terabytes. The
companies surveyed had 150 unique systems supporting their supply chains. The
promise of a single ERP system for most is an unfulfilled dream. Todays landscapes
for supply chain leaders are large, diverse and growing.

Fig. 4 Current System Complexity in Supply Chain Operations

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 Data is Growing in the Enterprise. Today, 8% of respondents have a Petabyte of data
in a single database. It is growing. It is a concern of survey respondents. 47% of
companies responding to the survey either have or expect to have a database with a
petabyte of data in the future. It is higher for those currently having Big Data
initiatives underway (68%). The petabyte is the new terabyte. Greater Comfort with
Structured Versus Unstructured Data. Traditional supply chains have largely focused
on transactional data, so it should come as no surprise that respondents of the survey
with Big Data initiatives have greater comfort with structured data types. As seen in
figure 5, they are least comfortable with social data.

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 Future is Demand. Current Focus is Supply. The greatest perceived benefits and the
lowest current performance ratings are in the area of demand data. However, due to the
greater familiarity with transactional data and supply systems, the most common
initiative is supply chain visibility. This was frequently seen in retailers with long
supply chains crossing many borders. The current focus (importance) and actual
performance for companies with Big Data initiatives are outlined in figure 6.

6. Importance and Current Performance of Big Data Projects in Companies with Big
Data Initiatives

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How to Get Started To get started, map the current projects within the organization and
evaluate if they are approaching the limits of traditional packaged applications and are
requiring more advanced techniques. Start with focused projects that have large data
sets and requires deep analytics:

Use Big Data Services. Where possible in buy- and sell-side markets, use Big Data
services. Examples include Bazaarvoice for ratings and review data and Dun and
Bradstreet for supplier sensing. To get started quickly, look for Big Data Services.

Invest in Sentiment Analysis. If being customer-driven is important to you, build

cross-functional processes to use new forms of customer data to evaluate new product
launch, market effectiveness of channel strategies and customer feedback on product
changes. While many companies outsource social listening to public relations
agencies, consider investing in text mining and sentiment analysis to be sure that you
can listen for the questions that you dont know to ask. Supply Chain leaders review

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customer data at least weekly cross functionally (marketing, sales operations, customer
service, product development and manufacturing operations).

Make Data a Core Competency. Supplier data and channel data needs to be cleaned,
enriched and harmonized. Invest in data repositories through GreenPlum, IBM
Netezza, SAP or Teradata to active data management on large data sets. Closely
evaluate the needs for ETL/Integration and data quality through vendors like
Informatica, IBM, SAP and SAS.

Use Black Boxes. The advanced analytics that come with Big Data systems are
packaged as black boxes. Encourage the analysts to let the technology do its job.
Make it systemic. Avoid the trap of the Data Scientist where individuals are allowed
to do one-off nonreplicable analysis.

Recommendations As organizations move forward, we offer five recommendations. As

your read through them, remember that it is a journey not a destination. It is a
marathon not a sprint. The practices are evolving; there are no experts today in
building Big Data Supply Chains.

Our recommendations for the supply chain leader are:

Sidestep Hype. There is No Need to be an Early Adopter. Each traditional vendor, in

their efforts to offer something new, will try to offer a Big Data solution. In your
discussions with technology providers, note that there is no ONE Big Data solution.
Instead it is a set of techniques for using large data sets that have high velocity and
data variety. It is not about stuffing new forms of data into old architectures. It is about
MUCH more than parallel processing or shared services in the cloud. Instead of
investing in hype, carefully invest by following industry maturity carefully. Build
organizational capabilities. Invest time to attend conferences to learn, and spend time
with telecommunication and eCommerce giants to sort through fact and fiction.

Big Data Needs to be Focused on Delivering New Value-based Outcomes. The

discussions of Big Data should start with the business need state and the impact on
value-based outcomes. Start with the problem, analyze the data set requirements and
then look for appropriate technology. The ah-ha moment comes when you find that
these new data forms do not neatly fit into traditional enterprise applications. It is not

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data that neatly stuffs into BI, ERP, APS or SCE architectures. They are too large, too
different, and moving at too fast of a rate of speed.

It Needs to be Led by Line of Business Leaders. While most organizations have their
Big Data efforts led by IT or the CIO, I find this problematic. IT budgets are under
attack and most of the initial funding for Big Data will need to be investment dollars
not funded through cost reduction initiatives. The focus needs to be on value-based
outcomes, and the business leader needs to drive the funding. As a result, IT leaders
need to educate the line-of-business leaders and build a guiding coalition.

The Use Cases are Many. Start Simple. There are so many use cases, that the
problem for many teams may be where to start. Start where the data is the most
available and the business requirements are the highest. Work with the teams to plan
for the future by plotting future projects on a road map. Look for those that offer
promise. After plotting these projects, look for data source similarities and build a
skills capability matrix to begin the process of education and awareness.

Dont be Limited by Traditional Paradigms. The uses of new types of data allow
supply chain leaders to solve new problems. Dont limit your thinking by traditional
paradigms. When you hear Business Intelligence (BI), think beyond rows and columns
to seize the Art of the Possible.

Conclusion We are entering the era of Big Data supply chains. Unstructured, mobile,
streaming and geolocation data offers great promise to improve supply chain
processes. However, it cannot happen without embracing Big Data techniques. Start
slowly, focus on the use of the data and build with the end in mind. For the supply
chain leader, we believe that now is the time to embrace the future concepts of the Big
Data supply chain. In the near future, it will be Go Big or Go Home. Leaders will
capture the art of the possible, while laggards will think in rows and columns. Now is
the time to prepare, invest and re-evaluate what is possible

Benefit of Big Data

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The possibilities to utilize this technology are vast. Big data technology has touch points in
different businesses across industries, but finds its place likewise in government organizations
and the healthcare sector. The development of sophisticated big data tools which change the
corporate culture in organizations and will have a significant effect on the managerial decision
making in businesses.
The targets of this research was to identify challenges in the field of big data, general technical
and business related issues, to elaborate on case studies and provide a first guideline to the
implementation of big data into a business organization. A model of data in the decision making
process furthermore points out the importance of company internal factors to the
implementation of big data.
The main findings are the influence of corporate culture on the decision making process when
utilizing data as management decision support. Furthermore, the research identified social
challenges for big data and challenges regarding work ethics. Big data creates a lot of new
opportunities for businesses, from the creation of business models to more efficient operations.
Case studies from various well-known companies demonstrate the rich possibilities that big
data provides and serve as guide for big data technology implementation in different SMEs in
undefined industries.
Potential Benefits
A Capgemini study [Capgemini Deutschland Holding GmbH, "Studie IT-Trends 2014: IT-
Kompetenz im Management steigt"(in German), Capgemini Deutschland Holding GmbH,
2014] identifies machine-to-machinecommunication (M2M) as the issue with the most gained
importance in the last year. M2M data is derived from sensors attached on machines or
products, which can collect various types of data like temperature, usage data or positioning
data. In 2013 11% of the surveyed companies quoted, that they already use data generated from
machine-to-machine communications. This increased significantly as in 2014, 23% of the
asked companies use M2M data. Additionally, 12% of the companies are in the status of
implementation and another 13% plan to implement. M2M enables automatic information
exchange between different objects, e.g. vending machines, cameras, transport vehicles,
containers and their corresponding database. Possible use cases can contain activities like
monitoring areas and machines, increasing the maintenance of facilities and an automatic
ordering if demand is recognized. The use case of automatic ordering can be fully automated

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up to a self-distribution of necessary goods. Regarding to the above-mentioned classification,
machine-to-machine communication will enable new business models and has the potential to
highly increase operational efficiency. The goal of the smaRTI research project
[Effizienzcluster Management GmbH, Smart Reusable Transport Items (smaRTI) - Intelligent
Material Flow, (online) http://www.effizienzcluster.de/en/leitthemen_
projekte/projekt.php?proPid=5, 2014] was to increase the intelligence of the material flow.
Therefore, the identification and localization of handling units, like palettes, is achieved
through the usage of Auto-ID technologies. A wide spreading of read points, like barcode or
RFID reader, leads to an increasing transparency of freight deliveries between companies.
When a handling unit is detected, the read points are generating events, which are available in
real-time and enabling better transparency and sped up processes. This is achieved due to
planning optimization of deliveries and supported detection of bottlenecks and risks. Latencies
can also be avoided or at least reduced. The project finished 2013 with a pilot implementation
for a candy product supply chain with 18 read points shared between the manufacturer, a
supermarket and handling unit pooling operator. The implementation focused in tracking 2500
handling units, which are transported in a loop between the three companies. Around 90.000
read events had been created. The outcome of the pilot implementation was a complete
transparent handling unit flow between the three participants. All companies see a benefit by a
roll out of the smaRTI results on a complete supply chain, not only for one product. Every
handling unit, and the transported goods could be directly located as soon they reached a read
point location. The next step is to analyze the smaRTI data besides the business processes data
to detect not only bottlenecks or risks along the supply chain, but also to find action within the
process, which can be optimized or excluded. An example would be some manual quality
measurement for counting the received goods and comparing them with the expected numbers.
In summary the smaRTI approach can decrease the loose of handlings units by 50% and can
reduce the goods in stock up to 10% in the consumer goods domain. Use cases with regard to
anticipatory shipping intention as described in [N. Bubner, Ni. Bubner, R. Helbig, M. Jeske,
LOGISTICS TREND RADAR: Delivering insight today. Creating value tomorrow!, DHL
Customer Solutions & Innovation, 2014] - will speed up delivery times of goods and increase
the utilization ratio of distribution capacities. One use case example represents DHLs volume
forecast with predictive capacity utilization and planning. The parcel volume analytics helps to

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improve the prediction accuracy of expected parcels and freight within their network. This is
realized by correlating data from different sources and with different degree of privacy
protection. Some input data could be the companys internal historic shipment data and external
events, public holidays, weather condition and forecast, Google search terms, and the shopping
behavior of online customers. Another example [J. R. Spiegel, M. T. McKenna, G. S.
Lakshman, P. G. Nordstrom, Amazon US Patent Anticipatory Shipping, Amazon
Technologies Inc., 12.2013] is Amazons US Patent for Anticipatory shipping from December
2013. The aim of this patent is to ship goods prior to the customers order to reduce delivery
time. A prediction of upcoming orders is the key element of the patent. This patent enables
several applications. First, a shipment is transported to a destination area without knowing the
complete delivery address. During the shipment to the specific geographical location, this
address will be completed depending on placed orders in the meantime. This optimized
distribution improves the lead time as well as the customer satisfaction and can help to increase
sales. Secondly, Amazon tries to match some of the goods while they are already in transit to
a specific geographical location with current customer orders. During the transport, the goods
are added to orders, which have been placed as expected - by a specific customer in this area.
The motivation is to use the disadvantage of lower-cost transportation (non-expedited delivery)
for buffering the speculatively selected items. If one of the items in transit fits to a customers
demand, the item will be delivered within a short delivery time. This results in reduced
transportation costs for both, Amazon and the customer. The shopping process itself has major
influence on the forecast data generated for shipment and delivery. Some information
influencing the forecast could be the specific web pages viewed and duration of views, links
hovered over with the mouse arrow and duration of hovering, shopping cart, wish lists and the
relatedness to previous purchases, e.g. in the case of new product releases, where no historical
buying patterns from similar customers exist.
CATEGORIZATION AND POTENTIAL BENEFITS
Classification
A categorization regarding the analysed type of data delivers seven potential scenarios. These
scenarios use both, structured and unstructured data, and can be further categorized in click
stream-, social media-, server-log-, sensor, location-, text-, and video-/audio-data [BITKOM-
Arbeitskreis Big Data, "Big-Data-Technologien Wissen fr Entscheider", BITKOM, 2014].

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The Application of Big Data Analytics can contribute to different targets and provide benefits
in various fields. The following sections can be divided into operational efficiency, customer
experience and new business models. Big Data Analytics can enable new business models and
generate new revenue streams. Operational efficiency based on Big Data capabilities uses data
for better decision-making and improvement in terms of process quality, performance or
resource consumption. The section of customer experience is mainly assigned to marketing and
e.g. focusing on more precise customer assessment, which also supports a companys SCM [2,
22]. By focusing on logistics and supply chains, Automatic identification and data capture
(Auto-ID) technologies like RFID and bar codes are widely used to track handling units and
the transported goods. Therefore, many read-points have to be shared along the supply chain.
Figure 1 shows the overarching model of data categorization. Data in the outer circle is of
higher fuzziness, volume and change frequency. A wider distance to the circles center
implicates less control and increasing ambiguity of both the data and its source. The inner circle
consists mostly of data that is owned by the company and administrated within the companies
IT infrastructure, e.g. ERP systems.
Fig. 1. Overarching model of data categorization
Measuring the benefits of Big Data is possible with specific IT related Key Performance
Indicators. These KPIs refer to qualitative and quantitative aspects, and can either be time-,
quality- or financially oriented. The five highest recommended KPIs are lead-time reduction,
increase of customer satisfaction, decrease of product costs and time to market and contribution
to sales increase [Capgemini Deutschland Holding GmbH, "Studie IT-Trends 2014: IT-
Kompetenz im Management steigt"(in German), Capgemini Deutschland Holding GmbH,
201]. Both categorizations show, that there is a high interlinking from an organisational point
of view. The application of Big Data Analytics for SCM affects other departments, e.g.
marketing and sales. For that reason, KPIs have to consider various facets for a holistic
evaluation of use cases.

What big data can do for supply chain

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The kind of information big data brings to the table can have a profound impact on supply chain
management, particularly in the areas of supply chain planning, procurement, collaboration and
end-to-end execution.
Supply chain planning Imagine taking years worth of production, supply, weather, order and
shipping information and being able to understand not only the correlation of these issues but
also the context of why and how decisions were made. Then imagine utilizing that data with
the desired business plan to accurately plot multiple scenarios and backup plans for this years
holiday rush. Big data allows for massive amount of data to be used, taking into account an
unheard amount of performance variables and the ability to leverage more complicated what-
if scenarios for advanced network optimization.
Procurement Imagine a world where datapure informationcould make procurement more
efficient. With big data, organizations can base procurement decisions on more factors,
enabling them to make better informed decisions that ultimately impact the bottom line. That
world is here. Purchasing decisions no longer have to be made solely upon production
requirements but a combination of multiple inputs including:
Planned production Forecasted customer orders Available supplier capacity Currency
fluctuations Contract rate increases The impending likelihood of disruptive events
Available raw material storage capacity
The current level of net working capital (NWC) and the impact of increased purchases on the
firm's NWC levels
The end result is a lower amount of networking capital outlay to support raw material purchases
and more efficient buying methodologies.
End-to-end supply chain execution With more data, you have a sharper picture of the factors
that impact your global supply chain and a more precise idea of what that impact could be. You
can feed your analysis with better input, giving you more meaningful output. Big data gives
your organization the ability to seamlessly combine and correlate multiple data sources to
ensure end-to-end supply chain execution is completed as efficiently and as effectively as
possible. These data sources include:
Data from enterprise-owned Commercial Off-The-Shelf (COTS) apps, hosted or cloudbased
Supplier provided data from EDI feeds to flat files to Web portal entries Telematic data

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feeds (e.g., GPS, temp control monitors, transportation geo-data) Weather, financial or other
event streams
By combining multiple data streams with other big data-related technology, such as geofencing,
a holistic picture of a complete supply chain is obtained. Adding advanced analytical engines
and sophisticated real-time visualization tools determines where the most important exceptions
are that require action and the most effective and efficient way to manage them. The result is a
holistic understanding of what is happening in an end-to-end supply chain and the ability to not
only identify and manage exceptions but to be able to predict when exceptions will occur. This
is a critical step to not only being agile but being resilient and ensuring customer satisfaction
and costs are not impacted when faced with unexpected exceptions, disturbances or
interruptions.
Machine-to-machine monitoring for predictive maintenance & better production quality
Manufacturing is a critical component of a companys end-to-end supply chain. Thousands of
production sensors provide vast quantities of data at subsecond speeds for analysis. Big data
and advanced analytics ensure this vast amount of data is utilized to monitor production
processes and identify when maintenance is required and when to take action before the
production quality is negatively affected. While quality testing is important, big data provides
the ability to ensure QA tests are confirmations of high product quality and not used to catch
errors or product quality issues.
This is especially important for aging manufacturing equipment that is outfitted with new
sensors to monitor production. A study completed in 2010 by ARC Advisory group found that
over 90 percent of process manufacturers acknowledged the use of automation beyond the
manufacturers obsolescence date. While extending the life cycles of this equipment is vitally
important, it is just as important to meet product quality requirements at the lowest possible
cost. Leveraging sensor data and advanced analytics with subsecond analysis enables the
continued use of older equipment while meeting product quality and production cost
requirements.
These are examples of the result. But lets step back for a moment. How do you get here? How
does it all work? How, even with tools in place, can you begin to get to the data that is most
critical for your business? Look no further than your own processes.

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Finding the nuggets: using process to filter data Theres big data. And then theres how your
business works. The insight, power and results you want come from looking at both in tandem.
With the massive amount of data collected, correlated and analyzed, it can be very easy to
become overwhelmedlost in the data. Process serves as a guide to understand how different
portions of data affect the outcome of a process in this case, the operation of your supply
chain.
Another real-world example: 10,000 transportation assets around the world are delivering
products to you or from you at any one time. Data on speed, route compliance, estimated time
of arrival and compliance to the customer-requested delivery date are all being tracked in real-
time. So, what assets need to have action taken because they are going to fail/not show up on
time, and how do you know this?
More importantly, how can you identify which transactions are at risk as early as possible in
the process to avoid costly problems like expedited shipments and high inventory levels to
compensate for performance failures and decreasing customer satisfaction?
Understanding each event as a segment of an overall end-to-end process helps guide what data
is valuable and what an appropriate response should be to any identified issues.
In this case, the enterprise understands the exact length of time it takes to obtain product that
is on the water, convert it to saleable inventory and move it to a specific customer while
having a general idea of what the expected pitfalls will be along the way. So when a massively
large order is placed with an emergency status lead time, the organization understands what
inbound product can be utilized to build this order. It can also help determine if it is feasible to
even deliver against the customer request or if it is not, the option of trying to reschedule the
order can be taken rather than spending an inordinate amount of time and resources, only to
fail.
As a business, you should have known you were going to fail by understanding, from a process
perspective, if there wasnt any possible way to comply with this customer request.
In simplest terms, knowing how your business works (even with large inventories of cheese
and sauce, you cant start or deliver the pizza until the dough is made) will determine what data
is most important to succeeding (how long it takes to have flour delivered, how much flour is
needed, etc.). The seemingly impossible mountain of data becomes much more manageable
once you know what youre looking for.

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Supply Chain Optimization
Supply chain optimization is the application of mathematical and statistical tools to develop
optimal solutions to supply chain problems. This enables analysts to create models to simulate,
explore contingencies, and optimize supply chains. Many of these approaches employ some
form of linear programming software and solvers. This allows the program to maximize a
particular goal given a set of variables and constraints. This includes the optimal placement of
inventory within the supply chain, minimizing the carbon footprint or minimizing operating
costs, such as manufacturing, transportation, and distribution costs.
Randomized Testing
Big data and analytics have enabled companies to use randomized testing to conduct
experiments to test and learnsometimes called
design of experiments. Randomized testing is a statistical method that involves conducting,
analyzing, and interpreting tests to evaluate which factors impact variables of interest. For
example, this might be asking whether planned changes in delivery or store layouts will
increase customer purchases. Randomized testing is at the heart of the scientific method.
Without random assignment to test groups, and without a control group, it is impossible to
know which improvements are actually due to the changes being made. This type of large-
scale testing is now possible as there is lots of data to compare and analyze.
Another significant enabler is that many current software applications are designed for people
with little statistical training. New software makes it possible to conduct design of experiments
by businesspeople rather than professional statisticians. For example, testing alternative
versions of Web sites is relatively straightforward. This type of testing is simple and is
becoming widely practiced in online retailers. Simple A/B experiments, such as comparing two
versions of a Web siteA versus Bcan be easily structured. The online retailer eBay, for
example, routinely conducts experiments with different aspects of its Web site. The site
generates huge amounts of data as there are more than a billion page views per day. This
enables eBay to conduct multiple experiments concurrently and not run out of treatment and
control groups. Similarly, the North Carolina food retailer Food Lion uses testing to try out
new retailing approaches again simply comparing A versus B. 30 This ranges from
comparing new store formats to simple tactical decisions.

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Transformations
Business Ramifications
Consider the following examples of companies that have implemented big data analytics:
Amazon claims its latest advanced analytics can now predict purchases before they
happen. Based on the pattern of customer computer searches and how long the cursor lingers
over a Web site, the company plans to start bundling and shipping items to distribution centers
in advance of actual purchases.
At Deere & Company, a new way of optimizing inventory saved the company $1.2 billion
in inventory costs between 2000 and 2005.
The global cement giant CEMEX has successfully applied analytics to its distinctive
capability of optimized supply chains and delivery times.
Walmart relies extensively on analytics to run its entire supply chain.
Proctor & Gamble used operations research methods to reorganize sourcing and distribution
approaches in the mid-1990s and saved the company $200 million in costs.
Questions that were once based on intuition and guesswork can now be answered in objective
and quantifiable terms. Big data analytics answers business questions such as the following:
What does the future look like? What do our customers want?
What is the reason for our success? Is our strategy working?
What activities should we pursue in the future? Which resources should we invest in?
What do we do to minimize our risk exposure? How do we protect ourselves from business
disruptions?
Changing the Present and Future
The ability to answer these questions changes virtually every aspect of business. It enables
understanding both the present and future. As such, it can enhance a companys competitive
position by better predicting competition and markets. It can dramatically improve operational
and supply chain performance. For companies that have implemented big data analytics, it can
increase productivity and improve efficiency, quality, and preventive maintenance. It can help
manage suppliers and customers, as well as logistics and transportation operations. It can also
better evaluate strategy, improve forecasting, help prepare for disruptions, and, overall,
improve risk management. Harnessing big data analytics has the potential to improve
efficiency and effectiveness, to enable organizations to do more with less, to produce higher-

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quality outputs, and to increase the value-added content of their products and services.
Companies can leverage their data to design products that better match customer needs. No
more guessing what the customer wants. Through in-store behavior analysis and customer
micro segmentation, companies can optimize market segments and know exactly what the
customer is buying. In fact, analytics is moving businesses into an era of shopper
marketingmonitoring and creating an entire shopping experience for customers no matter
where they are along their shopping path: at home (online), on the go (through geolocation),
and within stores (in-store monitoring)
Data can even be leveraged to improve products as they are used. An example is a mobile
phone that has learned the owners habits and preferencesthat holds applications, photos, and
data tailored to that particular users needs. That device will therefore become more valuable
with use than a new device that has not become customized.
Creating New Business Opportunities
The information potential of data is opening all kinds of new business opportunities. Consider
the possibilities from the mere ability to gather data about how car parts are actually used on
the road. This data can be used to improve the design of parts and is turning out to be a big
competitive advantage for the firms that can obtain the information. Consider the company
Intrix, which collects geolocation information. In 2012, the company ran a trial of analyzing
where and when the automatic braking systems (ABS) of a car kicked in. The premise was
that frequent triggering of the ABS on a particular stretch of road may imply that conditions
there are dangerous, and that drivers should consider alternative routes. With this, Intrix
developed the service offering to recommend not only the shortest route, but the safest one as
well. This is an entirely novel area of business. Big data is also helping create entirely new
types of businesses, especially those that aggregate and analyze data. Data is the new asset and
most organizations are unable to keep up with its rapid growth, scale, and evolution. This is not
their core competency. As a result, most non-IT companies are turning to some solutions
providers for help. Companies are routinely outsourcing this capability and turning to third
parties. This is the rise of the third-party analytics provider (3PA). These are various analytics
and IT experts, data brokers, software vendors, and solutions consultants. Similar to third-party
logistics providers (3PLs) that orchestrate the movement of physical goods, these companies
coordinate and make sense out of large data flows.

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Data-Driven Supply Chains
Few areas of business have been transformed by big data analytics as much as supply chain
management. Same-day delivery has become nearly mandatory to modern multichannel
retailing.
As consumers, we have developed this expectation. We dont think about it unless there is a
problem. It may be that the item we ordered online doesnt show up as scheduled or an
advertised item is out of stock when we try to purchase it. Achieving a competitive level of
global supply chain excellence cannot be accomplished without data-driven, end-to-end
operations. Consider companies such as Tesco. The company gathers huge amounts of
customer data from its loyalty program. It then mines this data to inform decisions from
promotions to strategic segmentation of customers. Amazon came early to the frontier of data
analytics. The online retailer pushed the frontier using customer data to power its
recommendation engine you may also like... based on a type of predictive modeling
technique called collaborative filtering. The company continues its rapid leadership in
fulfillment capabilities through data-driven decisions. Walmart was also an early adopter of
data-driven supply chains. By making supply-and-demand signals visible between retail stores
and suppliers, the company optimizes all its supply chain decisionsfrom customer fulfillment
to inventory tracking (think POS data and RFID sensors) to automatic purchase orders through
its supplier portal. The number of RFID tags sensing inventories across supply chains is in the
millions. In fact, the number of RFID tags sold globally is projected to rise from 12 million in
2011 to 209 billion in 2021.
Supply chains are increasingly combining data from different systems to coordinate activities
across the supply chain end-to-end. Marketing is generating huge volumes of POS data from
retail stores that is automatically shared with suppliers for real-time, stock-level monitoring.
RFID tags monitor inventory on shelves and in-transit coordinating with current stock levels
for automatic order replenishment. Add to this data from computer-aided design, computer-
aided engineering, computer-aided manufacturing, collaborative product development
management, and digital manufacturing, and connect it across organizational boundaries in an
end-to-end supply chain. Even more value can be unlocked from big data when companies are
able to integrate data from other sources. This includes data from retailers that goes well beyond
sales. It may be promotion data, such as items, prices, and sales. It also includes launch data,

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such as specific items to be listed and associated ramp-up and ramp-down plans. It also includes
inventory data, such as stock levels per warehouse and sales per store. This data is essential for
the supply chain to deliver the items that are needed when they are needed. Through
collaborative supply chain management and planning, companies can mitigate the bullwhip
effect and better smooth out flow through the supply chain. Many companies guard customer
data as proprietary, but there are many examples of successful data sharing. Walmart is a great
example of requiring all suppliers to use its Retail Link platform.
The exchange and sharing of data across the extended enterprise has provided transparency and
enabled coordinated cross-enterprise efforts. Big data analytics is the game changer. Big data
analytics is the game changer. It has given rise to the intelligent supply chain .

How Big data functions with Supply chain management

One of the most powerful analytics tools we can use on big data is correlation analysis.
Correlation analysis has been used for decades. What is different today are the insights obtained
when applied to the huge amounts of data. Correlations tell us whether there is a relationship
between any set of variables. It doesnt tell us why there is a relationship. In the world of
statistics, it is quick and dirty but offers important insights. Correlations let us analyze a
phenomenon by identifying a useful proxy for it. The idea is that if A often takes place together
with B, we need to monitor B to predict that A will happen. C onsider the case of Target and
identification of pregnant customers. 28 Big data analytics was able to identify the precise
purchasing bundle associated with a female customer in the second trimester of pregnancy.
Those who have seen the highly publicized story might recall the father of a 16-year-old girl
who was very angry at Target for sending his daughter baby couponsonly to discover that
indeed she was pregnant. The analytics perfectly targeted herno pun intended.
Correlation analysis also points the way for causal investigations, by telling us which two
things are potentially connected. This then tells us where to investigate further. This provides
information on where to go into modeling, causation, and optimization. This is an important

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benefit. It points us in the right direction and enables us to know where to dig deep with more
sophisticated analytics applications such as supply chain optimization.
How big data works for supply chain risk management

Identifying value-creating big data sources in supply chains

The three main ovals of the diagram show core transactional data, internal supply chain
data and various external sources of data that supply chains are exposed to.

The outer oval (other data) has the widest horizon along the variety axis, showing the
various natures of external data sources to supply chains. Moreover, the volume and
velocity of change in external data is higher on average than core transactional and
internal system data. Mainstream sources of big data in supply chains according to
volume and velocity versus variety are illustrated as below.

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The five main sources of big data in supply chains are included in above depicted Figure.
RFID and GPS big data can help in real-time inventory positioning and warehousing.
Point of sale (POS) data is one of the main enablers of demand forecasting and customer
behaviour analysis. Supplier big data can help manufacturers monitor supplier
performance, and manage risk and capacity.

Manufacturing big data and telemetry will help identify production bottlenecks and
impending machine failures, thus eliminating disruptive machine breakdowns. Overall

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the five sources of big data in Figure 4 can help strike a better balance between supply
and demand and increase supply chain efficiency and market responsiveness.

Future supply chains will be powered by sophisticated algorithms, simulations and

prescriptive analytics as depicted below-

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92
 The evolution of the digital supply chain

Behind the great potential of the digital supply chain (DSC) lies Industry 4.0,
the fourth industrial revolution. A transformation in production and
automation was brought on first by steam and water power (Industry 1.0),
then by electrification (2.0), and more recently by the digital computer (3.0).
Industry 4.0, digitization, is about companies orienting themselves to the
customer through e-commerce, digital marketing, social media, and the
customer experience. Ultimately, virtually every aspect of business will be
transformed through the vertical integration of research and development,
manufacturing, marketing and sales, and other internal operations, and new
business models based on these advances. In effect, we are evolving toward
the complete digital ecosystem (see Exhibit 1, next page).

At the heart of all this activity sits the digital supply chain, and it is key to
the operations of every company that manufactures or distributes anything.
Indeed, for many companies the supply chain is the business. It extends the
vertical integration of all corporate functions to the horizontal dimension,
knitting together relevant players the suppliers of raw materials and parts,
the production process itself, warehousers and distributors of finished
products, and finally the customer through a network of sensors and social
technologies, overseen via a central control hub, and managed through an
overarching data analytics engine (see Exhibit 3, page 10).

Driving the transformation to the smart supply chain are two tightly
intertwined trends. On one hand, new technologies like big data analytics, the
cloud, and the Internet of Things are pushing into the market.

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At most companies, products are delivered to customers through a very
standardized process. Marketing analyzes customer demand and tries to
predict sales for the coming period. With that information, manufacturing
orders raw materials, components, and parts for the anticipated capacity.
Distribution accounts for upcoming changes in the amount of product coming
down the pipeline, and customers are told when to expect shipment. If all
goes well, the gap between demand and supply at every point in the system
is small.

This rarely happens, of course. Forecasting remains an inexact science, and

the data it depends on can be inconsistent and incomplete. Too often,
manufacturing operates independently from marketing, from customers, and
from suppliers and other partners. Lack of transparency means that none of
the links in the supply chain really understand what any other link is doing,
or needs. Inevitably, it seems, the orderly flow from marketing to customer
is disrupted somewhere.

Over the course of the next few years, this will all start to change. This will
not be because we will have fewer disruptive weather events, flat tires, or
outsourcing snafus. No, what is changing is the supply chain itself. With the
advent of the digital supply chain, silos will dissolve and every link will have
full visibility into the needs and challenges of the others. Supply and demand
signals will originate at any point and travel immediately throughout the
network. Low levels of a critical raw material, the shutdown of a major plant,
a sudden increase in customer demand all such information will be visible

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throughout the system, in real time. That in turn will allow all players and
most important, the customer to plan accordingly.

Better yet, transparency will enable companies not just to react to disruptions
but to anticipate them, modeling the network, creating what-if scenarios,
and adjusting the supply chain immediately as conditions change.

The goal of the digital supply chain is ambitious: to build an altogether new
kind of supply network thats both resilient and responsive.

6 Strategy&

But if companies are to make the digital supply chain or perhaps more
properly, the digital supply chain ecosystem a reality, they cant just gather
technologies and build capabilities. They must also find people with the right
skills, and manage the shift to a culture thats willing to carry out the effort.
In other words, they must transform their entire organization.

The digital supply chain, as we envision it, consists of eight key elements:
integrated planning and execution, logistics visibility, Procurement 4.0, smart
warehousing, efficient spare parts management, autonomous and B2C
logistics, prescriptive supply chain analytics, and digital supply chain
enablers. Companies that can put together these pieces into a coherent and
fully transparent whole will gain huge advantages in customer service,
flexibility, efficiency, and cost reduction; those that delay will be left further
and further behind.

Future Big Data Practitioner

What are the capabilities of future big data practitioners?

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A survey of more than 3,000 business executives, managers, and analysts in 108
countries across 30 industries conducted by MIT showed that most of the respondents
identified three core obstacles for effective application of big data solutions (Big
Data: The Management Revolution, Harvard Business Review 2012)

1 lack of understanding of big data to improve business

2 lack of management bandwidth to interpret insights from big data, and

3 lack of big data skills in the line of business.

A KPMG International survey of 800 senior executives revealed three main concerns
about the application of [big] data analytics, namely:

1 implementing the right solutions to accurately analyze and interpret data,

2 identifying the right risk indicators, and

3 reacting in a timely fashion to insights as they arise (KPMG International D&A
Survey 2013).

Furthermore, the results of a D&A survey by KPMG indicated that (Going beyond
the data: Turning Data from Insights into Values, KPMG 2015):

85 percent of organizations experience difficulties in evaluating data quality and

reliability, and
Only 14 percent of organizations believe they have the required skills to conduct
[big] data analysis.
Therefore, to perform big data analysis in a way that adds value to supply chain
processes, supply chain practitioners need to develop data science capabilities and
skill sets. In fact, competition over the significant values of big data is becoming so
intense that in the future, recruiting and retaining people with the skills to analyze big
data will be a priority for companies and supply chains.
However, there is still a shortage of data scientists capable of interpreting large sums
of data to extract insightful information for organizations. It is reported that the US
alone has a shortage of between 140,000 and 190, 00011 data scientists to investigate
big data sources.
In the context of supply chains, big data practitioners and data scientists should have
the necessary skills to extract value from large volumes of upstream and downstream
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data (i.e. real-time and anecdotal) to help key stakeholders within the organization
make better-informed for taking decisions regarding demand forecasting, inventory
planning and logistics management.

Scope of BDA BigDataAnalytics

The term Big Data Analytics (BDA) refers to those algorithmic techniques, practices,
methodologies, and applications that enable businesses to analyse and make sense of critical
business data to help them understand their operations and market. BDA enables businesses to
predict the likelihood an event and take timely business decisions, ensuring, for instance, that
they are able to meet the needs of their customers over a sustained period of time. BDA
highlights the importance of data in terms of its volume (referring to the amount of data),
velocity (referring to frequency or speed by which data is generated and delivered), veracity
(referring to data quality) and value (referring to the benefits from the analysis and use of big
data). Improved productivity, competitiveness, and efficiency are amongst the benefits of BDA
within supply chain and logistics management; for instance, gaining information from
unstructured customer data can generate useful insights on product placement, pricing
strategies, optimization strategies, layout optimization, operational risk management, and
improved product/service delivery.

It is therefore no surprise that BDA has started receiving significant attention from supply chain
and logistics management and management science researchers. In response, this special issue
is seeking to pull together the latest thinking in this area. Much research on BDA has been
limited to conceptual frameworks, definitions, and some empirical papers. However, limited
studies have focused on applying big data modelling, algorithms, and analysis within supply
chain and logistics management. The aim of this special issue is to help researchers and
decision makers in understanding the modelling, algorithms, strategies, tactics and
implementation processes involved in applying BDA in supply chains and logistics and the
performance measures and metrics related to the application of BDA.

The scope of the special issue will be to present researchers and senior managers with
modelling and analysis, and application of BDA in supply chains and logistics. This should
include, for instance, applications of BDA on capacity management and planning of Human

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Resources, carbon foot-printing of supply chains and logistics, life-cycle management and
product and process development, improving energy savings, efficiency of transport, and other
related areas. The prime objective of the special issue is to publish original works from around
the world that demonstrate interesting applications of BDA.

The Change the business need

We are living in the super high way era of technological revolution.

The change the fashion, the pattern, the concept, tactics, the technology of business
need drastic and massive need of transformation and change. The era of 21 st
century is radical competition of giant technology of data science. Todays concept
and technology tomorrows obsolete. Every day changing the technology. The
planet is under conceptual war of technology. It is a tsunami that has transformed
entire industries and left numerous casualties in its wake. Like Gutenbergs
invention of the printing press changing the world through printing, the move
toward big data is creating an equally tectonic shift in business and society.
Transform or be left behind.

In the new world, however, there was a problem. To jump on the tails of Amazon
and leverage its competitive priorities did not take into account that playing in the
digital world was the competitive priority. Relinquishing control to another
company would simply cut into the companys customer base. Also, not
understanding that the world was now a digital place, Borders did not embrace e-
books, like Amazon and Barnes & Noble. Walking into Borders was like walking

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into a bookstore of yesteryear. The outcome was predictable. The competitive
world Borders lived in was one where booksellers tracked which books sold and
which did not. Loyalty programs could help tie purchases to individual customers.
That was about it. Then shopping moved online. The ability to understand and
track customers changed dramatically. Online retailers could track every aspect of
what customers bought. They could track what customers looked at, how they
navigated through the site, how long they hovered over a site, and how they were
influenced by promotions and page layouts. They were now able to develop
microsegments of individual customers and groups based on endless
characteristics. They could then create individually targeted promotions. Then
algorithms were developed to predict what books individual customers would like
to read next. These algorithms were self-teaching and performed better every time
the customer responded to a recommendation. Traditional retailers like Borders
simply couldnt access this kind of information. They could not compete in a
timely manner.

And Amazon? With its Kindle e-book readers and convincing hundreds of
publishers to release their books on the Kindle format, the company has cornered
the market. It has datafied booksturning them into quantified format that can
be tabulated and analyzed. 2 This allows Amazon everything from
recommending books to using algorithms to find links among the topics of books
that might not otherwise be apparent.

Embracing the digital age, technology, and datadriven decisions, the company is
moving well beyond wanting to be the biggest bookstore on the Internet. It is
moving toward being the most dominant retailer in the world. Amazon understands
that this means using big data and technology to manage its entire supply chain in
a synchronized manner. In fact, Jeff Bezos, Amazons CEO, is known for

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demanding rigorous quantification of customer reactions before rolling out new
features.

Data and technology have been used to coordinate everything from customer
orders to fulfillment, inventory management, labor, warehousing, transportation,
and delivery. Amazon is not the only one. Leading-edge companies across the
globe have scored successes in their use of big data. Consider Walmart, Zara, UPS,
Tesco, Harrahs, Progressive Insurance, Capital One, Google, and eBay.

These companies have succeeded in this game-changing environment by

embracing and leading the change. They have used big data analytics to extract
new insights and create new forms of value in ways that have changed markets,
organizations, and business relationships.

Big Data

Big data is simply lots of data. The term big data specifically refers to large data
sets whose size is so large that the quantity can no longer fit into the memory that
computers use for processing. This data can be captured, stored, communicated,
aggregated, and analyzed. There is no specific definition of the size of big data,
such as the number of terabytes or gigabytes. The reason is that this is a moving
target. Technology is advancing over time and the size of data sets that are
considered big data will also increase. As the volume of data has grown, so has
the need to revamp the tools used for analyzing it. That is how new processing
technologies like Googles MapReduce and its open source equivalent, Hadoop,
were developed. These new technologies enable companies to manage far-larger
quantities of data than before. Most important, unlike in the past, this data does
not need to be placed in neat rows and columns as traditional data sets to be

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analyzed by todays technology. Big data comes in different forms. It includes
all kinds of data from every source imaginable. It can be structured or unstructured.
It can be a numerical sequence or voice and text and conversation. It can come in
the form of point-of-sale (POS), radio-frequency identification (RFID), or Global
Positioning System (GPS) data, or it can be in the form of Twitter feeds, Facebook,
call centers, or consumer blogs. Todays advanced analytical tools allow us to
extract meaning from all types of data.

1.2 Analytics

Analytics is applying math and statistics to these large quantities of data. When
we apply math and statistics to big dataoften called big data analytics we can
gain insights into the world around us unlike ever before. We can infer
probabilities or likelihoods that something will happen. We are used to this in our
everyday life. We are accustomed to e-mail filters that estimate the likelihood that
an e-mail message is spam or that the typed letters teh are supposed to be the .
The key is that these systems perform well because they are fed with lots of data
on which to base their predictions. Moreover, the systems are built to improve
themselves over time, by keeping tabs on the best signals and patterns to look for
as more data is fed in. Think about teaching your e-mail filter that a type of e-
mail is a spam by labeling similar e-mails.

Even small companies have benefited. Consider the online music equipment
retailer The Musicians Friend. Using basic analytics, the company was able to
compare different versions of its Web page to identify customer preferences. The
preferred site generated a 35 percent increase in sales over the original home page.
This simple change resulted in a measurable improvement on return on investment
(ROI). 9

Big Data and Analytics: The Perfect Duo

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To set the record straight, big data without analytics is just lots of data. Weve
been accumulating a lot of data for years. Analytics without big data is simply
mathematical and statistical tools and applications. Tools such as correlation and
regression, for example, have been around for decades. In fact, Googles director
of research, Peter Norvig, explained it well by saying: We dont have better
algorithms. We just have more data. However, it is the combination that makes
the difference. It is through the combination of big data and analytics that we can
get the really meaningful insights and turn information into business intelligence.

Also, big data and analytics build on each other. Continued application of even
simple analytical tools results in their improvement, refinement, and
sophistication. Consider that as you increasingly identify the number of e-mails as
spam, the filter learns and becomes better at correctly identifying spam. It is for
this reason we use the term big data analytics throughout this book to refer to the
application of analytics to these large data sets.

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Turning information into intelligence

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